Disaster Preparedness for Small Business

4 steps for disaster preparedness

Studies show that more than 40 percent of small businesses close permanently after a disaster. Among the businesses that reopen, another 25 percent fail within a year.

A good disaster plan means fewer days out of business, better communication with customers and a better insurance company settlement. Add it all up and your plan could be the reason your small business beats the odds.

Look, we know you have a long to-do list. But trustworthy government resources developed over the past few years have made creating a disaster plan much easier than you’d think. As Russo says, “Even a basic plan is better than no plan.”

Here are four key steps involved in creating a disaster preparedness strategy.

Step 1: Identify risk.

Which of these large-scale disasters is a threat to your business?

• Pandemics
• Hurricanes
• Winter weather
• Earthquakes
• Tornadoes
• Wildfires
• Floods

If you have a single location, you already know the answer. But what about any additional areas that are critical to your business’s success? Consider additional business locations, where computer servers are located, where goods are stored and even areas where your employees commute from or work remotely. This risk assessment table from the Federal Emergency Management Agency (FEMA) will help.

If you have various business insurance types, ensure you’re covered for disasters that could hurt you. Your agent can tell you what coverage you need.

One thing you can do in the next 15 minutes to make your business more prepared is review one of the United States Small Business Administration (SBA) and Agility Recovery checklists below.

Step 2: Develop a plan.

The key to developing any good plan is to put one person in charge. This is your disaster plan coordinator. They decide how to develop the plan but you, as the business owner or manager, should be clear about what they must include. Here are some questions to consider when you assign this critical task.

Does the plan coordinator need a supporting committee?

If your business is large enough to have separate departments, the answer is probably yes. Each internal department will have its own unique assets, systems and requirements and you don’t want an outsider guessing what those might be.

Next, consider the entire scope of your operations. Do you ship hundreds of packages daily? If so, add a shipping company staff member to the supporting committee. Any vendor, supplier or government agency you use daily should be represented on your committee. They can explain their own disaster preparedness planning and how that will affect your post-disaster operations.

What are the minimum elements your plan requires?

Disaster plans aim to ensure the well-being of your employees, the stability of your location and your ability to keep the business running. You may need a 100-page guide or a simple series of reference sheets. Either way, your planning coordinator must understand the scope of your plan before they can properly develop it.

Your plan must address the following three goals, at the very least:

1. Keep employees safe.
2. Secure dangerous objects and chemicals. 
3. Keep your business running.

These are the minimum viable elements of a disaster plan:

• An evacuation policy, including maps and routes
• Who employees should contact, inside and outside the company, for additional information about what to do
• Who is required to stay onsite to perform essential functions or shut down critical items
• Who is responsible for rescue and medical duties
• Employee emergency contact information, plus information about unique medical needs
• Special instructions regarding hazardous materials and equipment, if necessary

What special circumstances does your plan need to address?

Direct your plan coordinator to address any special circumstances related to your employees, your environment or your business operations. Here are some examples:

• An employee with mobility issues
• An irreplaceable piece of equipment that requires maximum protection
• A specific Occupational Safety and Health Administration (OSHA) requirement for the storage of a particular chemical

If you have business insurance, this is an excellent time to ask your insurance broker or agent any questions you have. Do you know the monthly premium you pay? Part of what you’re paying for is access to your insurer’s risk management experts. They have seen the aftermath of disasters from coast to coast and can help you decide what to prioritize in your disaster planning.

Here are some other resources to help you build out your plan requirements:

Step 3: Implement and train.

Your disaster plan coordinator, their supporting committee and you, as the business owner or manager, should approve the final plan — but your work doesn’t stop there.

A disaster plan isn’t something you dust off when the red warning stripe comes across your TV screen. You’ll have action items as soon as your plan is complete. The idea is to identify things you can do now so you won’t have to do them in the days or hours before a natural disaster.

Here are a few examples.

Evacuation routes and wardens

Employees need to know where to go in case of an evacuation. Supply evacuation maps and post them in visible areas. Designate one or more individuals to ensure everyone gets out of the building safely — these folks are called evacuation wardens. OSHA recommends you designate one warden for every 20 employees.

Disaster communications materials

Approve emergency communications for employees, customers, suppliers and other stakeholders. Write these now, with fill-in-the-blanks to cover disaster scenarios. Ensure people who need access have it both at work and home. Don’t be like the state governor who couldn’t tweet because he forgot his password.

Employee go bag

“In the event of a weather emergency, employee safety needs to be the No. 1 priority,” said Peter Duncanson, disaster preparedness and recovery expert at ServiceMaster Restore. “Having a preparedness kit on hand, stocked with nonperishable food, clean water, first-aid supplies and emergency tools like a hand-crank radio and backup batteries will all serve as valuable resources, especially if you have to wait out the storm for an extended period of time.”

When you plan the items to include in an employee go bag, consider how far employees travel to your work location and that roads may be rendered impassable. This Red Cross quiz can help you decide what to include.

Training

Every employee in your organization has a role during an emergency — even if it’s getting themselves out of the building safely. Your plan should identify which employees are responsible for which roles.

Businesses of all sizes should have a person or team responsible for business continuity and crisis communications. In a small company, this will be you, the owner:

• Business continuity team: The business continuity team prepares the business to restart once it’s safe. This team also works with the insurance company to recoup losses caused by the disaster. The sooner you start making money again and the more you get back from your insurance company, the more likely your business is to survive.
• Crisis communications team: The crisis communications team is responsible for developing a crisis communication strategy and delivering crucial messages during a disaster.

Here’s a sample training scheme:

Step 4: Be a preparedness leader in your community.

In a natural disaster, you may be at the mercy of your least-prepared neighbor. The unsecured restaurant patio umbrella that comes flying through your window or the hazardous materials that floodwaters carry into your parking lot might not be a threat if you were in charge of them, but you aren’t. And the longer your community takes to get back on its feet, the longer you’re likely to wait for business to ramp up again.

Communities often come together after a disaster, but it would be even better if they did so before the disaster happened.

Consider sharing your disaster preparedness plan to encourage other business owners and raise your profile in the community. Promoting your disaster preparedness efforts helps in these areas:

• Hiring and retention: Promoting your disaster preparedness can help when you hire staff. By showing prospective employees — and reminding current ones — that you take employee safety seriously, you encourage them to join and remain with your company.
• New business acquisition: Talking about disaster preparedness is a way to connect with potential customers and referrers that doesn’t require a sales pitch.
• Social media growth: Feel-good stories about your steps to keep the community safe can generate positive social media attention. Don’t be shy — you put in the work and deserve those likes and shares.

Ready’s Business Emergency Preparedness Social Media Toolkit has sample messaging and graphics to work from. They’re a little dry, so challenge your marketing team to do better. They should relish the opportunity to talk about something other than your products.