Natural disasters and emergencies like accidents, wildfires, floods, earthquakes, and avalanches are catastrophic events that can force a business to halt its operation or permanently close down. Since no one is immune to disasters, it’s best to take proactive steps toward mitigating their impact. Having enough insurance coverage can also help you bounce back quicker.

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At the height of the disaster, you also need resources to help you deal with the immediate aftermath. Response guides, communication plans, or directives from the government and cause-oriented organizations can make a lot of difference.

Aside from salvaging what’s left of your business and calculating your expenses, you must account for the damage for your insurance claims. If you need help preparing for or moving forward after a major emergency, this guide is for you. You’ll find tips on mitigating the repercussions of disasters here.

What Characterizes Effective Disaster Preparedness?

In December 2019, COVID-19 emerged out of Wuhan, China, and later became a global pandemic. This crisis has affected businesses worldwide. Small business owners can find guidance on the CDC’s website.

Research indicates that over 40% of small businesses permanently close after a disaster, and among those that reopen, 25% fail within a year. A solid disaster plan reduces downtime, improves customer communication, and leads to better insurance settlements. Ultimately, your plan could be the key to your small business’s survival.

Dependable government resources have been available in recent years that have simplified disaster plan creation. Experts advise that even a simple goal is better than no plan.

1. Use FEMA’s Risk Assessment Table to recognize the potential risks

Which of these large-scale disasters poses a threat to your business?

• Pandemics
• Earthquakes
• Floods
• Hurricanes
• Tornadoes
• Wildfires
• Winter Weather

If you have a single location, you likely already know the answer. However, consider additional areas critical to your business, such as server locations, storage facilities, or areas where your employees commute or work remotely. FEMA’s risk assessment table can assist you in this process.

If you have business insurance, ensure coverage for potential disasters. Ask your insurance agent about the necessary range.

2. Create a Plan Using Different Authoritative Guides

Designate a single person as the disaster plan coordinator to create an effective plan. As the business owner or manager, you should provide clear guidance on what they should include in the plan. Consider these questions when assigning this critical task:

Does the plan coordinator need a support committee? The answer is likely yes if your business is sizable and has separate departments. Each department has unique assets, systems, and requirements that outsiders might need help understanding.

What is the full scope of your operations? For instance, if you ship many packages daily, involve someone from your shipping company in the ad hoc committee.

Any government agency, supplier, or vendor you regularly work with should also have representation. They can explain their disaster preparedness plans and how they affect your post-disaster operations and spending.

What are the essential elements your plan must contain? A disaster plan aims to ensure employee well-being, maintain a stable environment at your location, and ensure business continuity.

Your plan may vary in complexity, ranging from a comprehensive 100-page guide to a series of concise reference sheets. Your planning coordinator must clearly understand the plan’s scope to develop it effectively.

At a minimum, your disaster plan should encompass these three essential objectives:

• Evacuation Policy: This should include evacuation maps and designated routes
• Contact Information: Define who employees should contact, both within and outside the company, for additional guidance during emergencies
• Onsite Responsibilities: Identify individuals required to remain onsite to perform essential functions or shut down critical equipment. Also, specify who is responsible for rescue and medical duties

Additionally, your plan should incorporate:

• Employee Emergency Contacts: Gather employee emergency contact details and information about any unique medical requirements
• Special Instructions: Include any necessary instructions for hazardous materials and equipment if applicable

What unique situations should your plan account for?

Instruct your plan coordinator to address specific circumstances related to your employees, environment, or business operations. Consider these examples:

• Employee with mobility issues: Ensure a plan is in place to accommodate employees with mobility challenges during evacuations or emergencies
• Critical Equipment: Identify and provide maximum protection for any irreplaceable equipment essential to your business operations
• OSHA Requirements: Address any specific Occupational Safety and Health Administration (OSHA) requirements for storing certain chemicals or hazardous materials

During this planning phase, engage your insurance agent, especially if you have business insurance. Your insurance premium includes access to risk management experts who can offer valuable insights based on their experience with disaster aftermaths nationwide. Hold a meeting with them, for they can help you determine priorities in your disaster planning.

Here are some additional resources to assist you in developing your plan’s requirements:

• World Health Organization: Ongoing updates on coronavirus disease (COVID-19)
• Red Cross: Ready Rating Program
• S. Chamber of Commerce: Small Business Disaster Preparation Quick Guide
• FEMA Ready: Resources for Business Impact Analysis and Disaster Plan Performance Objectives
• IRS (Internal Revenue Service): Guidelines for Preparing for a Disaster

3. Provide Training Based on Government-provided Guidelines

Your disaster plan coordinator, their support committee, and yourself, as the business owner or manager, should review and approve the final plan. However, your responsibilities continue.

A disaster plan isn’t something you only consider when a warning appears on your TV screen. Action items should dealt with as soon as the plan is completed. The goal is to identify tasks that can be addressed proactively, eliminating the need to rush through them in the moments leading up to a natural disaster.

Here are a few examples:

Evacuation routes and wardens

Employees need clear directions in the event of an evacuation. Provide evacuation maps and display them prominently. Assign one or more evacuation wardens to ensure everyone exits the building safely.

Following Occupational Safety and Health Administration (OSHA) recommendations, designate one warden for every 20 employees.

Disaster communication materials

You must craft emergency communications for employees, customers, suppliers, and other stakeholders. Prepare these communications in advance, including fill-in-the-blanks to cover various disaster scenarios. Ensure those requiring access to these materials have it at the workplace and at home.

Employee “Go Bag”

Prioritize employee safety during weather emergencies. Create preparedness kits containing nonperishable food, clean water, first-aid supplies, and emergency tools like hand-crank radios and backup batteries. Consider the distance employees travel to work and the possibility of impassable roads when selecting items for the go bag. You can use a Red Cross quiz to assist in deciding what to add.

Training

Every person in your organization has a role to play during an emergency, even if it involves ensuring their safety. Your plan should clearly outline which employees are responsible for specific functions.

Businesses of all sizes should designate a person or team responsible for crisis communications and business continuity. In a small company, this often falls on the owner.

The business continuity team prepares the business for a restart after the disaster and works with the insurance company to recover losses. The sooner you resume operations and receive compensation from your insurer, the better your chances of business survival.

Crisis communications

Establish a crisis communications team responsible for crafting disaster communications and delivering these messages to relevant parties. This team is critical to managing communications during and after a disaster.

4. Take The Lead in Preparedness Within your Community Using Ready’s Toolkit

In a disaster, your neighbors’ lack of preparedness can affect you. Items like unsecured patio umbrellas or hazardous materials from flooding can become threats. Recovery for your business may take longer if your community is slow to bounce back.

Communities often unite after disasters, but preparing together beforehand is even better.

Being prepared is smart for business. Celebrating your disaster plan encourages others to do the same, benefiting your community and your business:

• Employee Attraction and Retention: Show that you prioritize safety, attracting, and keeping talent
• New Business Opportunities: Discussing preparedness connects you with potential customers and referrers
• Social Media Growth: Share your safety efforts for positive attention

Ready’s toolkit has helpful resources, but get creative with your marketing team for engaging content beyond product promotion.

photo credit: Milan De Clercq / Unsplash

Prepare Now, Improvise Later

Small business owners should start with a simple asset inventory, which takes less than an hour. After that, create a solid disaster plan. You should schedule planning reviews at least once a year, ideally every quarter.

The ultimate goal is to integrate disaster preparedness seamlessly into your business operations.  The accurate measure of your plan’s success is surviving a disaster and thriving during recovery.