The mainstream media’s coverage of the recent natural disasters, including the onslaught caused by hurricanes Harvey, Irma and others, has mostly focused on civilian casualties. But businesses also pay a huge price each time such natural calamities strike.
A significant chunk of the $108 billion worth of damages caused by Hurricane Harvey was on business establishments. The property damages that such calamities cause is also exacerbated by shutdowns, lower business productivity and fewer sales. For instance, when Hurricane Matthew hit Florida way back in 2007, Walt Disney World shut down for nearly two days. That’s a loss of several million dollars for just two days of closure.
As a small business owner, the impact from such natural disasters can be a lot more painful than the losses for Disney. Preparing for such unforeseen events may be cost intensive, but is completely worth the losses you may avoid.
Insurance
Property damages from disasters like floods, earthquakes or fire can run into the millions depending on the size of your organization. One unforeseen event could bankrupt your business overnight. Purchasing an insurance policy is mandatory in the case of some disasters while it is optional in the event of others.
Regardless of the legalities surrounding insurance, if you believe there is even a small probability for your business to be financially impacted due to a disaster, it is highly recommended that you buy insurance to cover your business. Some providers also help compensate for business interruption. It is a good idea to purchase an insurance that offers this. It does cost several thousand dollars every year, but there is absolutely no reason why you shouldn’t insure your business against such disasters if there is even a small probability of them occurring.
If you already have an insurance policy, it is recommended that you sit down and understand its coverage. When disaster strikes, there is no way to estimate the amount of time you will be out of business. During this time, you may still owe your employees their payroll. An insurance package that covers payroll can come quite in handy. In addition to the insurance itself, look into all your contractual agreements to see how you are covered. Businesses may be sued by vendors and suppliers who are affected by the disruption in your business – particularly if it violates contractual obligations. Talk to a lawyer to make sure that you are not expected to compensate your vendors for losses incurred due to events outside your control.
Cloud migration
While flood or fire insurance can help you buy new hardware and equipment for your business, they do not help when it comes to recovering the data stored in your computer or folders. Even if you do put a value on these assets while claiming your insurance, such disasters can still mean a loss of competitive advantage. For small businesses, such disasters could thus be catastrophic. One way to avoid such situations is to migrate your documents and data to the cloud. Cloud servers host all your critical information in multiple third party servers located across the world. This way, it is possible to get back all of this data with just a click of a button. In essence, you could easily get back to your daily routine if your data is in the cloud.
Emergency supplies
Preparing your business for a natural disaster does not only include protection for your business. A lot of disasters are unforeseen, and as a result, your employees are quite likely to be stuck in the workplace during such events. There are three types of emergency aids that you must stock up on. Aids like batteries, bottled water, first aid kits and flashlights are preparatory in nature. Barricades, bungees and two-way radios assist your employees during the event. In addition to this, it is also a good idea to stock dehumidifiers, disinfectants and mold inhibitor kits to help your business quickly recover from a flood or similar disasters.
Mock drills
One of the biggest hindrances to seamless evacuation or response during fire or natural disasters is the lack of preparation. Mock drills train employees on the best practices during evacuation and also provide them with the necessary know-how to take care of themselves and others during a disaster. For large enterprises, mock drills are sometimes mandated by law and employees in these organizations are often well-informed about their plan of action. Small businesses may not have the resources to conduct a mock drill effectively. You could however get together as a community and partner with your city’s fire department to organize mock drills at a community level. Such drills can be quite economical in training your employees on a plan of action.
Emergency communication systems
We have already talked about the need to maintain equipment like two-way radios to assist in disaster response. But sometimes, your clients, vendors and other critical stakeholders may need to be informed about your absence as well. This is especially important for businesses that work with foreign vendors and clients who may not be aware of events happening in your city or country. Maintain an updated database of your vendors and clients that can be accessed even during disaster times (when internet may be patchy or non-existent). If you work with an agency, you could create a contingency folder that they must access during disaster events. Keeping your stakeholders in the loop is important to make sure that they understand the vulnerability of your situation and are thus ready to give you a long rope during times of disasters.
Establish a telecommute strategy
Telecommuting is on the rise and if your business does not have a telecommuting plan in place, you may already be in the minority. Such a plan can come in handy during disasters when your workplace may need weeks or sometimes even months to get back in shape. Telecommuting is not just about letting your employees log in remotely. If you have a confidentiality agreement with your clients, then letting your employees work remotely may be considered a breach of this agreement. Also, if you have licensed proprietary software tools for your business, a telecommuting policy may require businesses to obtain these licenses for your workers’ personal devices as well. Identify contracts and licenses that may make telecommuting difficult and iron out the issues here before it is too late.
Provided that you prepare using the tips above, a natural disaster should be able to be weathered by a small business. Make sure you have your insurance policies in place, particularly if your business is located in an area that is at risk for such occurrences. Also make sure that employees are well prepared for the possibility of a natural disaster disrupting the work place, and make contingences in case anything does not go as planned.
