According to the Institute for Business and Home Safety (IBHS), about one fourth of all businesses that close because of a disaster never reopen. That is a startling statistic.
Consider what happened a while back to a local family business in my city. A carpet store that had been in business for thirty long years burned to the ground. Gone were thousands of dollars worth of equipment and carpet, plus two smaller businesses that were housed in the same building. Luckily the owners had plenty of business insurance to cover their physical losses. But they lost their most important business asset - customer records - because of failed back up systems. They thought they did the right thing by backing up their computer systems every night. But they forgot to test whether the back up would work. And it didn’t. Rebuilding their customer base will be tough and the long-term revenue impact is hard to measure. But you can bet it will be tough for them.
With disasters like hurricanes, tornados, fires, floods and terrorism, to name a few, it’s critical for small companies like yours to have a disaster plan. And to make sure the plan is practiced and tested to ensure there aren’t any gaps that could prevent your business from getting back to business. The SBA offers a quick disaster planning guide (pdf) to help you focus on the key issues to address.
For a home-based business, a disaster can be crippling. You could lose your home and your business in one swoop. Any small business owner can minimize the damage by simply having proactive strategies in place to deal with an emergency when it happens. When you consider all the disasters that could impact your business, it’s scary. What if:
- You arrive at your business to find it vandalized and all of your customer records missing?
- Your most critical employee becomes ill and requires an extended absence?
- Your computer hard drive (or network) crashes?
- You become the primary care giver for a sick family member?
- You become ill and can’t manage your customer commitments?
- Your business becomes inaccessible because of an emergency on your street?
- What would you do? Would your business survive? What would you grab if you had to leave your business quickly? After the emergency, how would you communicate with your employees? Customers? How long would it take to get back to business as usual?
Without a disaster plan, you’ll have a harder time getting back to work. That’s tough to do if you have no plan for action and little money to move forward. The time to formalize a game plan for an emergency is before it happens. Do it now.
Are you prepared for a disaster? Have you encountered a disaster in your business? How did you deal with it? Please take a moment to share your tip or story for others by leaving a comment.
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About the Author: Denise O’Berry is a small business expert who provides tools, tips and advice to help small business owners be successful. O’Berry is the author of “Small Business Cash Flow: Strategies for Making Your Business a Financial Success.” Her blog can be found at Just for Small Business.