Disaster-Proofing Your Business Is Easier Than You Think

Your business is your pride and joy, so if anything happened to it, it would be a disaster. After all, you’ve put everything into your business—your finances, emotions and time. But do you take the threat of disaster seriously?

According to data from the National Small Business Poll, 10 percent of small businesses said that they had experienced “man-made” disasters. The same poll found that a shocking 30 percent of small businesses had been impacted by a natural disaster at some point in their history. But despite the appalling odds of being affected, only 38 percent of firms had bothered to take out disaster insurance.

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A study by Sage, the big accounting company, looked into the reasons why small business owners don’t want to take out insurance on their businesses. Around a third thought that they didn’t need to take out disaster insurance, “because they’d never had a problem before.” Another 30 percent admitted to the survey that they hadn’t really thought about it, and around 27 percent said it wasn’t an important consideration for their business.

It seems, therefore, that many businesses are in the habit of making excuses and not doing what needs to be done to protect themselves.

Companies never know exactly when disaster will strike. But it’s not too late to look into ways of mitigating disasters now, even if you haven’t spent much time thinking about it before. Take a look at some of these strategies.

Conduct A Risk Assessment

It’s a good idea to get a sense of the types of disasters that your business faces before doing anything else. If you run a hair salon in a downtown area, think through the most likely things that could derail your business. What about a fire starting because of improper use of a hair dryer? Or how about the risk that your shop floor will get flooded if a local river bursts its banks? What if you take on a new staff member and they wind up injuring a customer?

Think carefully about the unique risks that your business today. Then go online and use free resources, like the American Red Cross’s Ready Rating website to complete an online assessment of your business’s preparedness. Sites like the American Red Cross and others provide useful information, tips, and tools for how to build a quality disaster preparedness strategy for your business.

Review Your Risks On A Regular Basis

It’s one thing conducting a risk assessment when you first start up your business, it’s quite another staying on top of those risks as you proceed. The best policy is to have a plan of action in place which timetables all of the checks that you need to carry out during the year.

If you’re an accountant, then these checks will be relatively straightforward. You’ll have to schedule checking that the fire alarm works and inspecting your pipes on your sprinkler system. If you run a manufacturing plant or a warehouse, these checks will have to be a lot more regular and detailed in order to avoid the risk of fire or damage to your property by other means.

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Create A Contingency Plan

If the worst should happen, which it may even with the best of planning, business continuity is your top priority. That means that it’s important to come up with a contingency plan, well in advance, to make sure that your operations can continue, even in the event of a disaster.

Start the process by thinking about the parts of your business that are most at risk and which are most critical. Then put in place a procedure for outsourcing those functions, should they become interrupted.

One way to do this is to book spare capacity at another factory which can quickly take over production if you suffer a catastrophic failure at yours. Another thing that you can do is build up a secondary list of suppliers, just in case one of your suppliers suddenly goes out of business and leaves you in the lurch.

Fox Business News recently gave some advice on the topic of contingency plans. They suggested that all businesses should have a second location from which they can operate, should the worst occur at their primary business site.

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This is easier to achieve than you might think. For instance, in the city of Joplin, Missouri, right in the heart of hurricane alley, two hair salons in the city came to a deal. They decided that if one of their shops became unusable for some reason, then they could share facilities until either of their salons reopened again in the future. When a tornado did eventually arrive and destroyed one of the shops and the stylists from the destroyed shops drove across town to the other and carried on seeing their clients at the alternative address.

Build Your Communication Plan

It’s all well and good having a detailed disaster response plan, but if you fail to communicate it to your team during an actual disaster, it’s all but useless.

When disaster strikes, things will be chaotic. Often, you’ll only have a few minutes to respond to a critical situation and avert disaster. It’s a good idea, therefore, to decide in advance how communications will be handled in an emergency situation.

Many companies start by deciding on a calling tree. This organizes who calls who in an emergency situation and makes sure that each person in the company is quickly informed. Other options include having a password-protected checking-in facility on the company network or an out-of-area phone numbers that employees must call to say that they are okay.

When a tornado hit Oklahoma, many companies used social media to make sure that their staff were safe.

Backup Your Data

These days, most businesses are using the cloud. But there are still a few stalwarts out there, relying on their own servers to store data. These companies are at risk and should consider backing up their data at a second location. It’s also a good idea to keep all essential paperwork in a fireproof box, including things like licenses, corporate bonds, and contracts.

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