Take cover
Photo by Justin1569

Take cover

Save your business from major losses with these disaster planning tips.

March 31, 2021

You’ve heard the sirens, but the weather event missed your business. You’re located near a large gas pipeline, but it hasn’t failed since it was built 30+ years ago. You opted against flood insurance because the river hasn’t crested its banks in more than a century. If you suffer from an “it-won’t-happen-to-me” outlook, it could permanently shut down your business in a matter of minutes. And minutes is all that it takes for a tornado to form, touch down and disappear; for a levy to fail, sending rushing water and debris into unsuspecting areas; or for a neighbor to spill industrial waste that dumps poison into your irrigation ponds.

Hazards are all around you, but there are ways to mitigate the risk and speed up the process to get your business back on track.

The Small Business Administration (SBA) estimates that roughly 40 to 60 percent of small businesses never reopen their doors following a disaster. When you hear “disaster,” don’t simply think flood, fire, tornado or earthquake. A hacker, a power outage, even a hostage event at a nearby location could cause a disaster at your business.

Preparation is key

Every business, regardless of size, must be prepared for a disaster. For starters, analyze the risks in the area around your business, according to Agility Recovery, a firm that provides post-disaster resources such as generator power, office space and computer equipment.

Think beyond the most common things that happen in your area and consider man-made events. There’s no need to prepare for hurricanes in Kansas or earthquakes in Miami. Instead, think about the neighboring businesses. Is there a petroleum refinery nearby? What are the risks associated with that type of business? A fire or explosion are examples, but consider uncommon things, too, like a massive public protest.

Think about the road or roads you share with other businesses. Could a safety issue shut down the road and keep you away from your company? These are a few of the many things to consider, according to experts at Agility.

Also consider how to plan for and recover from isolated events such as a burst plumbing pipe or an irrigation supply contamination.

The SBA and Agility Recovery teamed up to help small businesses plan and recover from work stoppages. See www.preparemybusiness.org/diaster-planning for several aids. It includes a risk assessment checklist to get you started. 

Once you analyze the risks, next you need to analyze your company’s critical business functions. If a particular business function is unable to operate, how will it affect the rest of your business? How does losing elements at a certain time of the year affect your organization?

Classify these critical business functions into the following categories: high (most severe), medium, and low (least severe).

When determining the criticality of a business function, consider the following:

  • What business objective/goal does this function support?
  • How often does this function occur?
  • How many departments perform this function?
  • Does the successful completion of this function depend on any other functions?
  • Is there a potential for revenue loss if this function is not completed?
  • Does this function directly impact the business’ image or market share?

SBA and Agility Recovery crated a critical business functions chart. Find it here.

Next examine how to mitigate risks and determine which risks are applicable to pre-planning.

Communication is also critical to disaster planning and recover. You must communicate with employees, vendors, customers, even competitors. When it comes to competitors, perhaps you’re working together to restore power after an ice storm.

Use the Emergency Communications Plan here.

But disaster planning is not solely for your business, it’s also for your employees’ lives. Business owners must be prepared to help employees during a disaster. Think about how you will help employees in the event of a fire or tornado at their own home, for example. Employees are as important to the business as the raw materials, utilities and data you have to secure.