Disaster Preparedness Tips for Small Businesses

It’s common sense, but it’s worth repeating: the best time to deal with any disaster is before it happens. Keep in mind that most disasters are of a much smaller, everyday scale than the September 11 terror attacks. No matter what its location, your business is vulnerable to a variety of natural disasters—flood, hurricane, earthquake, ice storm, landslide—and manmade ones—oil spills, civil unrest, fire, etc. Even though we may not like to think about it, there are many possible scenarios which could have serious adverse effects on your business and your employees.

According to the Small Business Administration, “A community relies on its businesses to generate jobs and tax revenue and to nurture a built environment that is healthy and sustainable. When a business protects itself from disasters, it is also protecting one of its community's most valuable assets.”

Here are just a few tips from the SBA on how to protect your business by being prepared for the unexpected:

FACILITIES TIPS:

1. Develop contingency plans to remain in operation if your office, plant, or store is unusable. Could you:

• Operate out of your home or a nearby storefront?
• Quickly transport critical items such as computers, inventory, and equipment?
• Save replaced equipment and reactivate it in an emergency?
• Store inventory, equipment and supplies off-site?

Examine the possibilities, make a plan and assure that you and your employees know what to do.

2. Keep extras of any hard-to-replace parts or supplies on hand. Store them off-site. If this cannot be done, work with suppliers in advance to assure a secure and adequate supply. Store several days’ supply in a place that is not vulnerable to the same disaster as your facility. Be sure to keep this auxiliary supply up-to-date.

3. Make upgrades now that would prevent possible future damage. Strengthening exterior walls, adding a retaining wall, or shoring up a creek bank are relatively minor projects in comparison to losing the building to flood waters.

OPERATIONS TIPS:

1. Purchase a backup generator to maintain full operations or critical functions such as refrigeration, lighting, security systems and computer control in the event of a power failure.

2. Have back-up vendors and shippers in place in case your primary ones are disabled. Set up relationships in advance and maintain them. Place occasional orders so that they regard you as an active customer.

3. Guard against loss of your customer base by diversifying your product lines, sales locations, or target customers. Make it part of your annual plan to develop new customers, even if your current customer base seems fine.

INFORMATION AND COMMUNICATION TIPS:

1. Make backup copies of all critical records: accounting and employee data, customer lists, production formulas and inventory.

2. Keep a backup copy of your computer’s basic operating system, boot files and critical software. Store a copy of all vital information on-site and a second in a safe off-site location. Make it a critical part of your routine to regularly back up files.

3. Make pre-arrangements with computer vendors to quickly replace damaged vital hardware. Keep invoices, shipping lists and other documentation of your system configuration off-site so you can quickly order the correct replacement components. Take care of credit checks, purchase accounts and other vendor requirements in advance so that the vendor can ship replacements immediately.

4. Surge-protect all computer and phone equipment through power and phone lines. A power surge through a telephone line can destroy an entire computer through a connected modem. Invest in a surge protector that has a battery backup to assure that systems keep working through blackouts.

5. Maintain an up-to-date copy of phone numbers, computer and Internet log-on codes and passwords, employee phone numbers and other critical information in an accessible location. Develop an employee "telephone tree" to rapidly contact employees in an emergency.

INSURANCE TIPS:

1. Review your current insurance coverage:

• Is it enough to get your business back in operation?
• Will it cover the replacement cost of vital facilities?

Make it a regular annual procedure to review and update insurance. Remember that insurance on mortgaged property probably only covers the lender, with nothing left over for you.

2. Be aware of your contents insurance. Does it cover the replacement cost of critical equipment?

3. Know what your insurance does not cover.

For more information: http://www.sba.gov/disaster