Prepare Your Small Business to Weather Natural Disasters

An article by Cecilia Camps    1 Comment

Damage costs due to disasters have tripled in 2010, jumping from $68 billion to $218 billion, and it’s no wonder. Natural disasters seem to be on a roll lately, with Haiti, New Zealand, and Japan being struck by large scale earthquakes. The latest disaster in Japan has garnered the public’s attention because of the tsunami that followed the devastating quake, and the  nuclear threat from broken reactors at the Fukushima nuclear plant.

The U.S. spreads across different climates and territories, and each has its own natural menaces. From earthquakes and fires in California, to tornadoes in the Midwest, to Hurricanes in the Southeast shores, all of us are more than aware of the possible damage that could be made on our homes and businesses.

The Office of Disaster Assistance, part of the U.S. Small Business Administration, offers “affordable, timely and accessible financial assistance to homeowners, renters and businesses following a disaster.” This assistance is provided through long-term loans with low interest rates. But before embarking on a loan, think about what you can do protect your investment.

HP and SCORE wrote an interesting report dealing with computer-related losses in small businesses that have faced a natural disaster. Do you rely on computers to store data and/or do daily operations? According to this report , “a company that experiences a power outage lasting more than 10 days will never fully recover financially.” Add that to the costs of repairing your building and prepare to have a heart attack.

But don’t despair. The best option in case a natural disaster hits your area is to prevent. Follow the old saying, “an ounce of prevention is worth a pound of cure.”

• Back up all of your data and store it in a location that’s located at least 100 miles away.
• Get insurance. There are several types of insurance policies out there. Shop around to find the one that works best for your needs.
• Stock your business location with everything you need to avert a catastrophe. This includes but is not limited to: fire extinguishers, first aid kits, emergency evacuation plan, and if you are located in an earthquake-prone area, attach loose heavy items to the wall (i.e. bookcases, hanging pictures, wall clocks, etc).
• Prepare an evacuation plan. Keep yourself, your employees, and your coworkers safe.
• If your business handles money, invest in a fire and water resistant safe.
• Assess how your business works, and decide what is essential. This will allow for faster reaction in the event of a natural disaster. Include payroll information, accounting systems, and decision-making data.
• Meet with other businesses in your building or complex to coordinate efforts.

Don’t let your company be one part of the 80% of those who close their doors after failing to recover from a disaster.

Do you know if your area is prone to natural disasters? Take a look at this map from the Federal Emergency Management Agency (FEMA).