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Will Your Small Business be Prepared if Disaster Strikes?

It’s likely that every geographic region of the U.S. experiences at least one form of natural disaster. Maybe your small business happens to be magically located in a region that is immune from tornadoes, hurricanes, floods, tsunamis, or even the dreaded sink holes. But this doesn’t eliminate the possibility of exposure to burglars, arsonists, or overly-enthusiastic protesters.

You need to be aware of common risks to your business. Good news: business owners who anticipate the worst can prepare their businesses for virtually anything. This is called disaster planning. Do it properly and you can return to business as usual in relatively short order if disaster strikes. Read on to learn the main components of a disaster recovery plan.

Start with a mental crystal ball

What might a disaster look like? Can you imagine standing in the midst of rubble after a tornado hits your building? Even relatively minor events might destroy computers and valuable data. You can’t plan for the worst if you don’t know what it looks like. As the top gun, you are responsible for knowing what to expect. But, you should also talk to your employees. Their different perspectives can be invaluable.

This mental picture helps you to develop a good disaster recovery plan, but it can also help you take damage control measures. For example, just think of how an offsite backup inventory might preserve customer relationships.

Information protection should be part of daily business life

Do you truly know how much backup information you need — and how current that information needs to be? Think long and hard to make sure that you arrange for timely backups of absolutely everything that you will need to resume operations. Here’s a list to get you started:

  • Insurance policy and contact information, which belongs on your smart phone, along with other backup areas
  • Accounting and financial records
  • Employee records
  • Customer lists, including any vital unique information about each one
  • Vendor and service provider lists

Backups need to go offsite and electronic data, including website backups, belong safely in the Cloud.

For paper records, consider finding a company that specializes in safe offsite paper storage. 

Cloud Communications also ensures that your business can get up and running after a disaster – no need to wait to buy new phones if yours have been destroyed, or wait for the lines to come back up. With cloud communications, you can simply use your smart phone, tablet, or desktop computer as a soft phone to continue business as usual.

Establish a detailed disaster recovery process

The first step of recovery involves filing the insurance claims needed before beginning repairs and replacing vital equipment and inventory. You also need a plan to handle every aspect of returning to business.

You need a cleanup and recovery plan that itemizes the types of work needed, who should do it and where they should do it. Anyone who can actually get to your facility must come in and salvage everything possible. Employees who are equipped to conduct business from home can often help most if they can call customers to explain order delays. In fact, service business employees can even keep producing deliverables from home in some cases.

You need to identify every detail of what your unique recovery process looks like, assign specific tasks to each applicable employee (complete with second and third choices), and write down a clear roadmap of the process. When distributing the plan, of course, make sure that everyone has the information necessary to contact each other and stay coordinated.

Make sure that your insurance coverage really fits the bill

Unless you happen to be in the insurance business, find a really good insurance agent who understands the special requirements of insuring business property.

Whether you need to insure the building or just its contents, you have many decisions to make. Do you want to insure for all risks or just named perils? Would you be comfortable getting a claim settlement based on what you paid for lost items, or would you willingly pay higher premiums to insure on a replacement-cost basis? Don’t forget that you need separate insurance to cover losses caused by floods.

Don’t expect to resume business as usual on the next day. You may need to initiate repairs, restock inventory, and handle countless other issues. In fact, even if your business has not been touched directly, you can still lose business when destroyed local infrastructure prevents staff and customers from getting there or when disaster hits your suppliers. These issues prevent you from conducting business — and earning income — so consider adding business interruption coverage to your policy.

Make disaster recovery planning a top priority

After years of hard-earned business success, it only takes one major disaster to lose everything. If you don’t have a written, detailed disaster recovery plan in place, start working on it today. Try searching for disaster recovery plan templates online to help you get started. If the task seems overwhelming, consider finding a disaster planning consultant who knows what to do. Hopefully, you will never face a major disaster, but an investment in disaster planning is as important as any other aspect of your business.

About the author

Carol Roth is a radio host on WGN, a CNBC TV contributor, a ‘recovering’ investment banker & a bestselling author of The Entrepreneur Equation. You can find her on Twitter @CarolJSRoth or at She also has an action figure made in her likeness.