Ten Steps Small Businesses Should Take to Prepare for a Disaster

When people think of disasters, they generally envision tornados, hurricanes, floods, or other catastrophic events that devastate entire communities. But for a business—and particularly a small business—a disaster can be something as seemingly trivial as a failed server, a telephone outage, or a ruptured water pipe.

Although these types of business interruptions rarely make the news, they can have a devastating impact on your business, often bringing operations to a screeching halt.

The real-world impacts of an interruption can be staggering. Statistics indicate that around 40 percent of the businesses affected by a disaster will not survive beyond two years following the interruption because leadership teams do not have a recovery plan in place.

Creating a basic, executable disaster-recovery plan is one of the most important steps you can take to protect your business and ensure its survival regardless of the type of disaster. It is for this reason that Agility Recovery routinely partners with organizations, such as the Ready Campaign, the U.S. Small Business Administration, and FEMA, to help bolster business owners’ resilience programs.

As a result, Agility has developed a free educational campaign hosted at www.12StepPrep.com where visitors can access dozens of planning tools and on-demand educational training sessions focused on the fundamental elements of a comprehensive strategy.

Below you will find an overview of the most important steps to help ensure your small business is equipped to tackle a wide array of disasters, from a collapsed roof to a Category 5 hurricane:

Assess your risk—both internally and externally
Which disasters will most likely impact your business? Although major disasters dominate the headlines, most business interruptions are caused by everyday events, such as human error and power outages. It is crucial to assess your risk for catastrophic weather occurrences, but equally important to assess exposure to more conventional risks. Click here to assess your risks.

Analyze your critical business functions
Evaluate and document how your company functions. Determine which processes, employees, equipment, and materials are critical for your daily operations. Remember to include critical business functions, such as billing, payroll, and service fulfillment. List these functions and create a process for restoring them in the event of an interruption. Click here to analyzing your critical business functions.

Plan for an alternative location
What would you do if your office or facility was inaccessible tomorrow? Where would you go to continue your basic business operations? Review your site requirements and develop a plan for recovery. You may ask employees to work from home, relocate to a secondary site, use the site of a similar business partner, or turn to a vendor that provides recovery office space. Click here to learn how to find an alternate place to work.

Consider supply chain preparedness
According to recent surveys, less than half of American businesses have recovery plans in place to maintain their supply-chain logistics in the event of a disaster. It’s critical to talk to your key vendors and suppliers about their recovery plans. Develop relationships with alternative vendors in case your primary vendors experience an interruption. Click here to learn how to prepare your supply chain.

Ensure employees and their families are prepared for disasters both at work and at home
Most businesses will admit their most important assets are their employees. While data recovery and business continuity may form the backbone of a disaster recovery strategy, if employees are unable or unwilling to report to work, having your systems back online becomes worthless.

Help your employees prepare for disasters at home, ensure they know their role in your business-continuity plan, and develop and practice crisis-communications plans that incorporate both employees and their families. Click here to learn how to help your employees and their families to be prepared.

Back up your data and practice restoring your technology
In today’s highly technical, connected economy, information is more valuable than ever. Backing up your business data and critical applications is an obvious priority. Make sure to store your data in an offsite, secure location, preferably 50 miles or more from your site(s).

Also, regularly verify that you are able to retrieve your data and restore it back to onsite hardware. Outline a plan to replace computers, printers, software, and other technology essentials should your office be completely destroyed.

Create an employee, vendor, and key client communication plan
Create a 24-hour phone tree for all employees, including emergency contacts, such as spouses or closest relatives. Make sure your employees, suppliers, vendors, partners, and even clients know ahead of time how to exchange or obtain information should your standard methods of communication fail.

Also, compile a list of your critical clients and vendors and store it in an offsite location. Determine a process for contacting them should your systems go down. Click here to learn how to create a solid crisis communications plan.

Assemble an emergency kit
An emergency or disaster-recovery kit should contain the typical essentials, such as flashlights, extra batteries, fresh water, nonperishable food, and a battery-powered radio.

However, office emergency kits should also incorporate extensive first aid supplies, copies of important documents, critical records, petty cash, software-licensing keys, corporate letterhead, and passwords. Click here to learn how to build a workplace disaster recovery kit.

Regularly review your business insurance coverage
Is your business insurance coverage adequate? Talk to your agent to assure that you are insured against potential risks. Consider business interruption insurance, which may compensate you for lost income during and after a disaster.

Storing photos of your building, equipment lists, and policy information in a safe and secure offsite location can greatly help during the claims process.

Test your plan
Make sure your business-recovery plan is actionable and can be executed during times of crisis. Test your plan annually and update it as necessary. Make sure to educate and inform employees when making changes to your plan and include training for all new hires. Click here to learn how to properly test your plan.

By following these steps you will minimize the time it takes to recover critical functions, as well as the associated expense. With almost half of all businesses folding just two years following a disaster, developing a disaster-recovery plan may mean the difference between business survival or collapse. BW

Hyune Hand, CEO of Agility Recovery, helps organizations of all types prepare for and recover from any type of business interruption so they can continue critical business functions. www.agilityrecovery.com