25 percent of all businesses don't reopen after a disaster
Create
a business recovery plan to avoid becoming a statistic
One of this region’s most expensive disasters unfolded the night of Sept. 9,
2013 when over 10 inches of rain fell in a 24-hour period devastating Boulder,
Colo., and several other communities, with flash floods and inflicting damage
on nearly 20,000 homes and hundreds of small businesses. Unfortunately,
our region is prone to a variety of natural disasters such as flooding in North
Dakota, tornadoes in South Dakota, and the 2017 Montana wildfires that scorched
more than 1.3 million acres of land.
History
has shown that 25 percent of businesses that close because of a disaster never
reopen. Following hurricanes Harvey and Maria hundreds of small
businesses in Texas and Puerto Rico closed their doors for good, and in turn
caused tremendous financial hardship on their owners. Small businesses are
especially at peril because few have the resources to assess their risks and
develop recovery plans for the future. As part of its mission to help small
businesses recover after a disaster the U.S. Small Business Administration has
developed the following simple tips when thinking about developing a disaster
recovery plan.
1. Evaluate your exposure. Know your region and
the types of disasters most likely to impact your business. Consider your
facility’s proximity to flood plains, wild fire areas, rivers and streams,
dams, nuclear power plants and other hazards.
2. Review your insurance coverage. Now is the time to consult your insurance agent to determine
whether your coverage is sufficient. Make sure you understand what’s covered by
your policy, and determine if you need flood insurance; remember, many general
policies do not cover flood damage. Check into business
interruption insurance, which helps you cover operating expenses if you’re
forced to temporarily close. Calculate the cost of business
interruptions for a day, week, month or more. To the extent possible, set
aside a cash reserve that will allow your company to function during the
recovery phase.
3. Review
and prepare your supply chain. Develop
professional relationships with alternate vendors, in case your primary
supplier isn’t available. Place occasional orders with them so they’ll regard
you as an active customer. Create a contact list for important business contractors
and vendors you plan to use in an emergency. Keep this list with other
documents in an easily accessible place, and also at a protected off-site
location.
4.
Create a crisis communications plan.
Try to make sure your staff, customers, vendors, contractors—everyone you do
business with—know what’s going on in the aftermath of a disaster. Establish an
email alert system, keeping primary and secondary email addresses for your
employees, vendors and customers. Provide real-time updates to your customers/clients
and the community so they know you’re still in business and in the process of
rebuilding after the disaster. Don’t forget to test your plan beforehand.
5. Who will run your business after a disaster strikes? Let your employees know the emergency chain of
command. Maintain a clear leave and sick-day policy during disasters.
Have a backup payroll service should your office be destroyed.
6. Create and implement a Business Continuity Plan. This plan will help keep your business operating as it responds
and recovers from a disaster or emergency situation. This plan should: indicate
when it will be activated; identify essential business functions and staff to
carry out these functions; determine which employees will be considered
non-essential vs. essential; and identify records and documents that must be
safe and readily accessible to perform key functions.
7. The
SBA’s disaster program is the agency’s largest and only
direct loan program. Under it, the SBA offers two types of disaster loans –
physical and economic injury – to assist those affected re-establish with
access to low-interest and fixed rate capital during a difficult time.
This information is critical to remember if you hope to reopen your
business in a timely manner.
Developing
an effective and workable disaster recovery plan is critical for all small
business owners. For more information on disaster planning go to www.sba.gov/disaster.
|
