The Business Plan: What precautions are you taking for the next catastrophe?

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The Business Plan: What precautions are you taking for the next catastrophe?
Bill Reagan
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By Bill Reagan

Lately, our television screens have been filled with scenes of hurricanes and earthquakes, and people struggling to recover their lives – and businesses.

For those devastated businesses, survival statistics are especially
grim. FEMA estimates 40 percent of businesses do not reopen after a disaster, and of those that do reopen, 25 percent fail within one year.

Tragic events dramatically teach us how much of our daily routines are dependent on infrastructure that we take for granted.

We expect to reach colleagues, customers and our support network by email or phone. We count on accessing critical financial or operational records electronically or in our file cabinets. A variety of calamities can make those inaccessible – temporarily or permanently.

These include hurricanes, earthquakes, tornados, floods, severe storms, fires, pandemics, power outages, demonstrations, terrorism and cyber-attacks.

The aftermath of catastrophes is always chaotic. Larger corporations dedicate staff to emergency planning and have established backup procedures, but small businesses tend to procrastinate such pre-planning, and often flounder through the recovery process.

Even when federal, state and local resources are made available, it’s often not obvious when and how to access them.

Since hurricane images are fresh on our minds and September is National Preparedness Month, this an ideal time to pause for a moment to think about the most critical aspects of your business and the many ways they could be disrupted. With those contemplations, you can then plot a few basic preparedness steps. Here are some basics: Check your insurance to see what coverage you have. Is it adequate? Do you have flood and business interruption coverage?

Establish a communications plan for alternate ways to reach employees, customers and your support system. This might necessitate keeping key lists and records offsite.

Have offsite backup for your digital files. This can include a full copy of your encrypted data on an external hard drive taken offsite, and/or using a cloud storage backup service. Note that offsite storage of data, lists and records must be routinely updated.

Prepare a handy, waterproof and fireproof survival kit that includes cash, nonperishable food, water, first aid, sanitation, flashlight and battery supplies. Retailers and restaurateurs might add a manual credit card machine, credit card slips and instructions on what to do in case of an outage. If you have perishable items, consider a generator for refrigeration.
Make sure all of these contingency efforts are periodically explained to all staff.

Most emergency preparedness recommendations are too cumbersome for small businesses to realistically undertake. SBA has more succinct guidelines and checklists at SBA.gov/ prepare.
Alexandria Small Business Development Center staff interacted with SBA and FEMA following the disaster declarations for both 9/11 and Hurricane Isabel. Most of the resulting disaster loans approved throughout Northern Virginia followed the Alexandria center’s direct involvement.

We pray there’s never another occasion to use that expertise, but local businesses should note Alexandria SBDC as their go-to contact in dire circumstances. Preparedness efforts aren’t easy to prioritize, but they can predetermine business survival.

The writer is the executive director of the Alexandria Small Business Development Center.

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