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7 Steps for a Small Business to Take for Disaster Prep

Every year, natural disasters such as earthquakes, forest fires, floods and mudslides have an economic impact. According to a 2017 survey, of all businesses in areas affected by natural disasters in 2016 and 2017, 96% experienced revenue losses. A total of 35% lost more than $25,000 in revenue.

Illustration saying Disaster Plan.

Clearly, as a small business owner, it's imperative that you have a disaster preparedness plan that will keep your customers, your employees, your business and yourself safe during and after a disaster. The following pointers can help.

  • Determine what type of disaster you'll most likely deal with. Not every state or region is prone to the same type of disaster. For example, if you're located in Florida, you should be concerned about hurricanes, whereas if you're in the Midwest, tornadoes could present the bigger threat.
  • Ensure your physical premises comply with all local codes and regulations. Check with your municipality to find out what the local codes and regulations are, and make sure you comply with them. For example, this might include installing storm windows or making sure that evacuation routes are clearly marked.
  • Get disaster-specific checklists and tips. The Small Business Administration provides information for hurricanes, winter weather, earthquakes, tornadoes, wildfires and floods. These can be highly useful to inform your emergency response plan.
  • Create an emergency response plan. This should include an evacuation route, shelter, emergency supply kit and first-aid kit. You should also appoint certain employees to be in charge of first aid and CPR and ensure they get the needed training. Review the plan with your employees and test it at least once a year.
  • Create a business continuity plan. Reserve sufficient funds to set your business up in a different location and operate for a month. Have all data automatically backed up to the cloud, so it doesn't get destroyed and you can access it from a different location if necessary. Research alternative offices you could rent short-term and find out what the fastest way is to obtain office furniture and equipment. In addition, save all important contact numbers for customers and partners, so you can inform them when and where you'll be resuming operations.
  • Make sure you have sufficient insurance coverage. As a part of your business insurance, you should get coverage for the types of disasters that could impact you.
  • Keep your insurance documents in a safe place. Store them offsite — for example, in a safety deposit box at a bank — so you can easily access them when you need to file a claim.

For an in-depth overview of what's involved in creating a disaster preparedness plan for your business, visit this Federal Emergency Management Agency page. It offers several useful resources ranging from an emergency response plan worksheet to a document that can help you estimate the costs of a disaster preparedness plan.

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