Preparing For the Unexpected
By Rhonda Abrams

Originally published August 19, 2004

Fifteen billion dollars: that’s the estimate of how much damage Hurricane Charley has wrecked upon Florida. Much of that has been done to small businesses. Natural disasters can hit any small business anywhere. Floods. Fires. Tornados. Earthquakes. And now, there’s the horrifying potential of terrorism.

Twice, I've had my business interrupted by natural disasters - a flood and a major earthquake. I've been lucky; all I've ever lost was power and a few days work. Others will not be so fortunate: they'll lose inventory, customer records, equipment, income. Hopefully, they’ll never lose a life.

Every business – no matter how small – needs an emergency preparedness plan. This doesn't have to be complicated, and you don't have to practice fire drills. A few simple steps can save you a lot of money and heartache.

The preparations you make depend on the dangers your location is likely to face. Bolting down bookshelves may be more important in Santa Barbara than Salt Lake, but many steps can be critical for businesses anywhere, of any size.

* Emergency plan: Before disaster strikes, determine the critical components of your business. Here’s how: for a one-month period, keep notes on what you do and what you need to do it (employees, data, power, phones, Internet, access). What would happen if an emergency struck? How would you get phone messages? Can you get your email from a remote location? How would you contact your employees? Where could you work? Make contingency plans for every aspect.

* Insurance: As awful as a disaster can be, the effects will be less devastating if insurance covers the financial losses. Disaster insurance can be expensive, but like liability or fire insurance, should be evaluated just as any other business expense. Consider business interruption insurance which covers you even if your business doesn't suffer physical damage, but you lose income due to the effects of a disaster, such as closed roads or loss of power.

If yours is a home-based business, examine your policies and talk to your insurance agent. Most homeowner policies don't cover things such as computers, tools, samples. So adjust policies accordingly.

* Data: Our businesses rely on our records, so it’s critically important to regularly back-up your computer data and store copies of both digital and paper data OFF-SITE. Online data back-up companies (such as or EVault) offer relatively inexpensive options for storing data over the Internet. At the very least, in small companies, the boss can take a back-up copy of records home once a week; just make sure it’s at least a mile from the office or store. Get a fireproof safe for vital documents; make copies and store those off-site or with your attorney.

* Power: For vital business equipment, purchase auxiliary generators. For data, you can purchase inexpensive backup power supplies to give you about a half hour’s extra power for computers, giving you time to back up records.

* Safety: In a serious disaster, the most important thing is safety: for yourself, your employees and customers. Keep flashlights (with fresh batteries) on hand to leave in the dark. Develop evacuation plans; know how to exit your building in the dark or in a fire. And -- okay, I lied -- conduct fire drills.

* Employee back-up: Emergencies also come in the form of personal disasters, such as illnesses and accidents, so make backup plans in case you or key employees become unavailable. Make certain that someone knows where your records are and has the power to deposit checks, pay bills, and can contact customers. This could be a key employee, an attorney, even a family member. Just make sure you trust them!

* Back-up supply sources: Remember, a disaster elsewhere can prove to be a disaster for you if your business depends on distant key suppliers. Develop a list of alternatives in case your regular supplier becomes unavailable.

Finally, keep in mind that disasters have psychological as well as physical and financial effects. You and your employees will need time to readjust, so expect some distractions and extra time spent around the water cooler recounting just where they were when the dam broke, the tornado struck, or the earth shook. Stay safe!

Copyright Information
Title:  Preparing for the Unexpected
Author:  Rhonda Abrams

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