Small Business Advice
Disaster planning for small businesses
QUESTION: With hurricane season upon us, how should one prepare for a disruption of business due to a storm or other natural disaster?
ANSWER: While Hurricane Florence is still fresh in our minds, it is wise to give thought how to deal with such an event. Think about all the time and resources you have invested in your small business. Imagine that it’s all gone: furniture, equipment, inventory, records, everything. What would you do?
While we are powerless to prevent some accidents and acts of God, a proactive disaster management plan can mitigate their effects on your business and help speed your return to normal operations. Here are some tips for developing a disaster management strategy:
Identify potential hazards: In addition to natural disasters, such as hurricanes and floods, consider man-made disasters, such as fires, toxic material spills, civil unrest, vandalism and terrorism. Even if your business is not directly affected, such events could disrupt your utilities and create problems with supply chains critical to your business.
Develop an operational contingency plan: Assess the feasibility of operating out of nearby rented office or warehouse space, or even your home. Perhaps a mutual agreement with a friendly competitor to share space and other facilities is worth considering. Determine what equipment and other resources will be needed to continue operations. Important documents, backup copies of computer records and other vital information should be stored at a secure off-site location or in the “cloud.”
Ensure the safety of employees and customers: Develop an evacuation plan that includes access to shelters, hospitals and other emergency services. Keep emergency telephone numbers clearly posted, and maintain up-to-date emergency contact and essential medical information for all employees.
Perform a safety inventory: Regularly clean and test smoke detectors, changing the batteries at least once each year. Make sure you have several well-stocked first-aid kits and that all fire extinguishers are fully charged. Keep a supply of all types of batteries used in your business, and purchase a portable generator for emergency power, with fuel safely stored.
Review your business insurance coverage: Your coverage should be enough to get your business back in operation at the earliest possible date. It should cover the replacement cost of buildings, contents and essential facilities. In Florida, windstorm is priced separately and has its own deductible. Most business owner policies do not cover floods or earthquakes; these coverages may be purchased separately. Special coverage may be needed to cover computer hardware, software and stored data. A major consideration is business interruption and extra expense coverage for loss of income and other expenses incurred to quickly return to normal operations. A qualified, professional commercial insurance agent can prove to be a valuable resource in crafting a disaster management plan for your business.
Gray Poehler is a volunteer with the Naples Chapter of SCORE.
A SCORE counselor since 2005, Gray Poehler owned and operated an independent insurance agency with 20 employees and two locations. He has earned the Certified Insurance Counselor designation and is familiar with both personal and commercial property and casualty insurance. Areas of expertise include: Business Finance and Accounting; Business Strategy and Planning; Business Operations; Human Resources and Internal Communications; Sales, Marketing and Public Relations.
To learn more about management issues of small businesses, contact the SCORE office nearest you.