Everyone is responsible for the disaster preparedness of their own households. Business owners and executives, however, have additional responsibilities. Not only do they have to get their house in order, but they are also responsible for hardening their own businesses to continue to operate despite a local disaster – and to facilitate the recovery of the business, for the sake of investors, customers, employees and vendors.
Here are some basic tips those in executive positions can take to ensure the survival of a small business in the event of a disaster.
- Create a written disaster preparation and recovery plan. This document should be in hard copy in your office, and emailed to new workers, so that they can access the plan even if your offices don’t exist.
- Inventory on-site first-aid kits and other emergency supplies.
- Secure data offsite. What will happen if your servers are destroyed in a flood or fire at your office? If your business would be damaged, it’s time to arrange to back up your files at a remote location, or on the Internet.
- Designate an alternate meeting site. What happens if your office is suddenly destroyed or inaccessible? Your employees should know where to report for work. Managers should have a roster of phone numbers.
- Arrange for alternate facilities. You may need to arrange new office space or warehouse space in a hurry. Have an alternate location already scoped out.
- Get a generator. Don’t count on waiting until disaster strikes to get one. There will be a run on supplies. Ensure the generator has enough output to power your key equipment, whatever it is – be it computers, printers, and refrigerators (The cost of one generator big enough to power your refrigerator or freezer can pay for itself many times over in preventing food spoilage for those in food service businesses).
- Name responsibilities. Who will come to the office prior to a hurricane to put up storm shutters? Who will be available to come fill and place sandbags? Who can clean up if there is severe damage, and when? Remember that your employees will have conflicting loyalties. Some may be having difficulties preparing their own homes and families. Others may be members of the National Guard, and may be mobilized for disaster response. Take this possibility into account.
- Audit your insurance coverage. Lay out all your policies and make sure they cover the possible hazards, and that the amount of insurance reflects your needs. Double check flood coverage. Most regular insurance coverage doesn’t cover floods.
- Double check key person life insurance and disability insurance coverage. The same disaster that disrupts your business could disable or kill key people, and cause severe disruption to the rest of the business as well.
- Consider business interruption insurance. These policies help companies by providing a cash benefit to keep them going in case of a temporary closure. Can you make your payroll for a month or two while you get your business back on its feet after a disaster? If not, you may need business interruption insurance to avoid going bankrupt, or to retain valued employees while your business has shut down.
- Have a public relations plan. Designate a spokesperson for the company. Reach out to the local media with your recovery story. Don’t let people get the impression your business closed – particularly if you have to relocate. This could be a fatal blow, even if you do everything else right.
- Diversify your telephone systems. Hurricanes and other disasters may knock out Verizon phones but not AT&T service, and vice versa. It can take time before workers can repair towers or reroute signals. By ensuring your workers have different cell providers, you can spread the risk out, so that your ability to communicate by cell is not wiped out by the loss of any one cell tower.
- Make a note of this phone number: 1-800-659-2955. It’s the phone number to the federal Small Business Administration. The SBA provides low-interest loans to qualified small businesses affected by disasters to help them keep running through a disaster and its aftermath.
- Copy your tax returns and other key documents. Keep them online somewhere. Keep hard copies in a fireproof safe or deposit box offsite – preferably 100 miles away or more. If you live on the coast, keep it inland. If you live in a flood plain, keep it up hill. Identify your hazards, and don’t expose your valuable assets and papers to the same hazard in two different locations.
Above all, though, use your judgment, critical thinking skills, and work through the different contingencies that may affect your business. All businesses are different, and one business may have different needs than other business next door. For example, when Hurricane Katrina was menacing New Orleans in 2005, many nursing homes and other health care providers had difficulty evacuating their patients and residents. In some cases, low-paid staff didn’t show up for work – they were busy evacuating themselves or their families. If you rely on low-paid staff that takes the bus to work, don’t expect them to be available immediately prior to a hurricane, for example, unless you make and communicate arrangements in advance. For more information, visit Ready.org/business, which has a variety of tools and planning tips for business owners and executives.
BGES Group’s office, located in Larchmont, NY is a full service insurance agency offering, Property, Liability, Umbrella Liability, Business Auto, Bid & Performance Bonds, Inland Marine, Worker’s Compensation, Worker’s Compensation Premium Recovery, New York State Disability, Group Health, Life insurance, Personal lines and Identity Theft.
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