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Disaster Prep Tips for Small Business Owners


As a small business owner, you invest more than just money into building your business. It represents a tremendous amount of time, energy, resources and personal sacrifices. Now, imagine if your business were gone in an instant through no obvious fault of your own. An estimated one out of four businesses will not reopen following a major disaster, according to the Institute for Business and Home Safety.

While it is easy to get caught up in running your business day-to-day, it’s equally important that you properly plan and prepare for disaster situations.

Is your business ready? Consider this checklist from and SBA’s “Small Business Disaster Preparedness Guide” as you begin preparing your business’s disaster plan:

1. Utilize an “all hazards approach”.

Some disasters may seem more likely than others and, consequently, we may overlook the risk for others. If your business is located in California, for example, the risk for an earthquake is likely top-of-mind. But failing to plan properly for all potential disasters can expose your business to unnecessary risks that could have been avoided.

Additionally, remember that disaster preparedness encompasses more than just natural disasters, like floods, tornadoes, earthquakes and hurricanes. Small business owners also need to consider the impact of a widespread illness (like the H1N1 flu pandemic), acts of violence, terrorism, and the failure or malfunction of technology systems. These disasters could have just as devastating an impact on your business as a flood or earthquake. The Department of Homeland Security recommends that small businesses follow an “all hazards approach” for disaster planning.

2. Conduct a Business Impact Analysis (BIA).

The Department of Homeland Security recommends conducting a “Business Impact Analysis” (BIA) to determine which time-sensitive or critical processes will be immediately impacted by a disaster. Using the BIA Questionnaire, consider the following:

  • Which financial and/or operational processes will be immediately disrupted?
  • How does disaster timing and duration impact this disruption (e.g., damage to a store before the holiday shopping season could substantially hurt yearly sales totals)?
  • What is the estimated financial impact including lost/delayed sales and income, increased expenses, contractual penalties, and the possible delay of new business plans?
  • What resources/business processes are essential for minimum business function?

3. Understand disaster impact cost/recovery.

A completed BIA report should document the impact of potential disasters on business function and include strategies for mitigating this impact, according to the Department of Homeland Security. To do so, prioritize the order of events for business restoration. Which financial or operational systems must be addressed first to bring minimum function back or mitigate financial loss? Who are the employees that will be essential to bringing these systems back online? The answers from this exercise will be used to create your Business Continuity Plan.

4. Create a Business Continuity Plan.

A Business Continuity Plan will define roles and responsibilities for key emergency response team members and a continuity team leader, identify succession of management, delegate authority, and prioritize recovery efforts. Outline communication strategies for your employees. Who will be responsible for contacting employees after the emergency or initiating the emergency response plan? Who will contact key contractors or vendors to keep them apprised of the situation? Even if your company has just a handful of employees, it is still important to establish clear roles for continuity and communications to avoid confusion during the emergency. offers a Business Continuity sample plan to help guide your plan process.

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ECC Monitor: OK