Is My Business Prepared for a Natural Disaster?

If your business was impacted tomorrow by an earthquake or a citywide power outage, would you know what to do? More importantly, would your employees know what to do? Having a plan in place to help you respond to a disaster could help your business survive while others have to close their doors. 

Extreme weather events, fires and other disasters can wreak havoc on a small business, especially if it has only one location. However, a recent survey showed that only about half of small and medium-sized businesses in the U.S. have a disaster recovery plan. The same survey, by Symantec, showed that the median cost of downtime for these companies is $12,500 per day.

Some parts of the country are more at risk than others for natural disasters, but fire, burglary, or loss of internet connectivity can affect any business at any time, so it’s important to have a plan in place to prepare your business in case an emergency does occur. Whether you label it an emergency preparedness plan, a disaster recovery plan, or a business resumption plan, it will help you get back to business as soon as possible with the least amount of collateral damage. 

An Ounce of Prevention 

While you can’t protect your business against every eventuality, you can take steps to lessen your exposure to risk. Here are some preliminary steps:

  • Review your insurance policy with your agent to make sure you have coverage not only for damages, but also for any costs related to business interruption.
  • Make sure all your safety equipment is in place (fire extinguishers, alarm systems, emergency lighting, etc.) and that it’s inspected and tested regularly.
  • Protect vital business records. Your most valuable paper documents should be stored in file cabinets that are fire-resistant. Digital files and data should be backed up on a regular schedule and stored online or at a secure offsite location. 
  • If your business is heavily dependent on connectivity, you may want to set up backup servers in a different part of the country, so you can switch over if your on-site servers fail or are inaccessible. 

Develop a Plan

  • Estimate your risks: Is your business located in an area that’s prone to earthquakes or floods? Would your employees have difficulty evacuating your high-rise building in an emergency? Would your business be unable to function if the internet was not available for an extended period? Answering questions like these should help you devise a plan to prepare for the dangers you’re most likely to face. 
  • Establish an evacuation plan with both primary and secondary routes and exits. Then make sure those routes and exits are clearly marked and well lit. Designate an outside rendezvous location where everyone can meet so you’ll know when the building has been cleared. 
  • Create an emergency kit with essential items like a first aid kit, flashlights, battery powered radio, nonperishable food and bottled water. Make sure the kit is easily accessible.
  • Make a list of emergency contact numbers. While most first-responders can be contacted by calling 911, you may also need to contact utility companies, your insurance agent, the owner of your building, and major suppliers and clients. 
  • Designate one executive or a small committee to officially declare the existence of an emergency and put the plan in action. Assign other duties as needed, including notifying major clients, acting as spokesperson with the media, or making sure the plan is kept updated. 
  • Communication is a key element in ensuring the success of your plan. Save a copy in multiple secure locations, and make sure key employees know how to access it. Every employee should know the evacuation routes, safety procedures, the location of the emergency kit, and their role in the telephone tree. Include emergency preparedness in new-employee orientation, and emphasize its importance on a regular basis. 
  • Make sure your plan is updated at least quarterly to account for employees entering or leaving the company, changes in contact numbers, modifications to your building that may modify evacuation routes, etc. Then make sure the updated plan is distributed to those who need it. 

Test Your Plan

The best way to tell if your carefully prepared plan will work in practice is to test it. As soon as you have a draft, call a meeting specifically to discuss it, make sure everyone understands all the components of the plan, and invite suggestions on how to improve it. Consider conducting a tabletop exercise every year: develop a specific emergency scenario (a burglary over the weekend, a flood that washes out access to the building) and ask the group to run through the procedures step by step, including the call tree. After you’ve tested the plan, make whatever adjustments are necessary and send out revised copies.

A disaster recovery plan should not be done once and put away. It needs to be regularly updated, communicated, and improved to make sure it’s available when it’s needed most. The future of your business may depend on it.

Read Part 2: Unnatural Disasters