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Disaster Preparedness for the Small Business
Owner
Cindy Hartman
How
quickly can your company get back to doing business after
a tornado, fire, flood or computer crash? Every year, thousands
of companies are unprepared. The US Department of Labor
states that over 40% of small businesses that experience
a disaster never reopen, and of the remaining companies,
at least 25% will close within 2 years.
1.
Continuity plans. Most business owners agree that having
a plan is important, but too few take the steps to prepare.
Plans vary according to each individual company's needs,
but the basics are the same no matter the industry, size
or location.
Identify
what types of emergencies - from a temporary electrical
outage to a large geographic catastrophe - could affect
your company, the likelihood of each happening, and how
they could affect your business. Then, with that in mind,
determine your needs. Once this information is collected,
it is easier to put a plan in place to help resume operations.
2.
Determine your immediate needs. What data do you need the
day after a disaster? Check with your IT provider on availability.
Does your telephone service have emergency options to ensure
you don't miss any phone calls? Have your customer, vendor
and employee information readily available.
Can
you run the business from a different location? Develop
relationships with other companies so you can set up temporarily.
Also, create a relationship with a competitor you trust
who can meet your customers' needs short term. This will
help you maintain your relationships with your customers
even when you are not able to provide the product or service
yourself.
Have
back-up vendors and shippers in place in case your primary
ones are disabled. Establish relationships in advance and
maintain them. Place occasional orders so that they regard
you as an active customer when you need them. Keep extras
of hard-to-replace parts or supplies on hand and store them
off site.
3.
Information. Many companies store their important files
in a safe or on an external hard drive in the office. If
the building is damaged or items stolen, it is highly likely
your data will be, too. Online backup is a safe, low-cost
option. You can establish frequency of backup, which will
allow you to resume doing business quickly.
4.
Have adequate insurance coverage. Review your policy with
your agent so you understand what is covered and what is
not. Do you have Cash Value or Replacement Value coverage?
Is this coverage on your building or contents or both? Do
you have flood insurance? Should you? And don't forget about
coverage for water backup of sewers, drains, or sump pump
failure. Another area many business owners don't consider
is Business Interruption Insurance. These are issues only
you and your agent together can address.
In
conjunction with your insurance policy, compile an asset
inventory with photographic records and a written report.
Knowing what you own, when the items were purchased and
the cost will help reduce the process when filing your insurance
claim because it will help you remember everything you owned.
Even if you have adequate insurance coverage, most policies
require a detailed list of what was lost, damaged or stolen.
During the stress of recovering, you will most likely forget
many items, and the time savings is imperative so you can
begin rebuilding your business. Be sure to secure this information
off site, and update the inventory annually.
Disaster
may never strike, but if something does happen, having plans
in place will help you through the transition and increase
the odds that a temporary business interruption does not
become a permanent one. According to the SBA, small businesses
provide nearly 45% of the nation's payroll. A commitment
to being prepared will support your employees, customers
and the local economy.
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