Hurricane Katrina destroyed 60 percent of the small businesses in New Orleans in 2005.1 Disasters of such magnitude don’t happen often, but would your company survive a lesser event, such as an irretrievable loss of important business data?
AT&T recently conducted a survey that sheds light on the vulnerabilities of small businesses and suggests ways to help protect your company from the unthinkable.2 The findings underscore the pressing need for small business owners to be more prepared.
Here are four ways you can get started:
1. Assess your preparedness. You’re probably thinking that a disaster won’t happen to you, but the odds are against you. More than 25 percent of small businesses have experienced a disaster, emergency or interruption that reduced revenue in the past two years, according to the survey. Do you know how prepared you are? These questions can help you assess your company’s readiness. In addition, the Safeguard Your Business, launched by AT&T, features videos, resources and tips to help you evaluate and improve your preparedness.
2. Develop a business continuity plan. Having a business continuity plan is key to surviving a disaster. Ironically, the businesses that can least survive a disaster—very small ones—are the ones most vulnerable: 63 percent of those with under 20 employees don’t have a business continuity plan, while nearly one-third of companies with 20-99 employees don’t have one.
If you haven’t written a plan yet, do so as soon as possible. The plan should identify roles and responsibilities for staff members and include ways you will communicate with customers. It should also define how you will protect your facilities and equipment, operate without water and electricity, and evacuate if necessary.
3. Make sure you’re properly insured. More than 25 percent of the disasters that afflict small businesses cost $100,000 or more according to the survey. This underscores the need to be fully covered by insurance. To make sure you’re covered properly, identify every man-made or natural threat to your business. (You may want to consult this list of disasters that commonly affect your state.Then, meet with your insurance broker to ensure you are covered for every possibility.
Maintain an updated inventory of your business property, including purchase receipts, appraisal documents and photos. Also create a system to protect accounts receivable and tax records. Store a copy of this information somewhere off-site.
4. Back up your data. One area that many businesses can easily prepare for is data backup. Just over half of small businesses and more than two-thirds of very small businesses don’t back up their data to an off-site device or via the Internet, leaving them in danger if something happens to their physical structures.
To help protect your data, make sure your company performs backups every day and stores the data on an off-site device or online. More than 40 percent of small businesses don’t back up their data daily, and that number grows to 63 percent for very small businesses, according to the survey.
Preparing for the worst doesn’t require much time or expense—it just requires some attention.
1 One Year After Katrina, Institute for Southern Studies.
2 The 2012 AT&T Business Continuity Survey was conducted online among a representative sample of 381 principals, CIOs and IT directors at companies with up to 500 employees in the United States by Bredin Inc. between May 10 and May 17, 2012. The survey had a margin of error of +/-5 percentage points at the 90 percent level of confidence.
Alice Bredin is an internationally renowned small business expert. She is founder and president of Bredin Inc., a marketing consultancy that helps Fortune 500 firms develop profitable, long-term relationships with small and medium businesses. She has advised millions of business owners over the last 20 years through her books, syndicated newspaper column, radio commentary and forums.
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