Natural disasters are all around us. It is absolutely astonishing how the weather patterns are changing and the impact they are having with unexpected impact all around us. Every day we turn on the news its earthquakes, fires, floods, tornadoes, and now even a volcano. Frankly, even a terrorist attack would cause the same result and can we really even say it’s an unforeseen situation?
However, when we bring up the topic of being “prepared” for such a disaster, many of us immediately think of our personal or family situation, but not the for emergency preparedness in regards to our business.
We often forget that these same disasters affect business owners and can create even greater hurdles for entrepreneurial families to get back on their feet.
Personally, I have been a Scoutmaster off and on for years, and not only do I try to teach my boys to live the Scout Motto: “Be Prepared”, but even I oftentimes forget the little things. There was a particular trip on a campout that I forgot a can opener, and after a less than robust dinner around the campfire, I went home and bought a couple extra ‘non-electric’ can openers in case of a disaster.
This ‘preparation’ at home with even the basics and having a manual can opener, needs to extend to our businesses. What would we do if we lost all of our accounting records, equipment or inventory? How quickly could we get our business back up and running in the event of an emergency? These types of issues could certainly be more devastating than not having a can opener.
In response to this significant issue for business owners, the Small Business Administration created “A Disaster Planning Guide for Small Business Owners” to help small business owners prepare themselves and their businesses for the unexpected. There are obviously all sorts of disasters that can affect our business, even including terrorism or vandalism, however, the SBA’s suggested we at least consider five types of major disasters: Wildfires, Tornados, Hurricanes, Floods, and Earthquakes while we better prepare our businesses for a potential disaster.
Here is a checklist to get you started from my own experience and research, as well as some from the SBA Guide:
- Emergency Checklist. Start with a checklist that you can review with your Management team and even if you are a sole-proprietor, have a plan in your files that you review regularly. Consider what natural disaster is most likely to hit you in your geographic area and what may be the greatest priorities on the list.
- Business Records. Maintain all records (client lists, accounts receivable, accounting records, data, etc…) on a ‘cloud server’ or have some sort of off-site backup system with redundancy.
- Employee resources. Keep back-ups of records on Employees, Customers and Vendors so you could re-start your business quickly if needed and have an offsite back up as well.
- Inventory and Equipment. Create a list of all inventory and equipment currently installed and being used by your business. Take pictures and have anything possible that could be helpful in an insurance claim. This list could also help you re-furnish and set-up your business quickly after a disaster.
- Rental property. If you own rental property, take the same precautions to have pictures and lists of appliances and fixtures attached to your rental property for an insurance claim if it is destroyed or you simply have damages to your rental property. Of course, this is a good business practice in order to enforce your lease agreement, but also in the event of a disaster and a possible insurance claim.
- Insurance Policies. Make sure you review your insurance policies on a regular basis and ensure you have the right type of insurance in effect. An annual review with your insurance agent is a must. If you have ever made an insurance claim, you have learned the hard lesson that insurance policies don’t cover everything. Again, regular video and pictures are critical. This is an extremely helpful tool to prove your damages and show your insurance company the condition of your equipment and assets.
- Technology. Keep a list or record of all URLs, usernames, and passwords saved in a safe off-site or ‘cloud server’ to quickly restart business software or systems if necessary.
- Cell phone services. Could you create a mobile hot-spot to have internet access if your power goes out? Consider investing in some affordable technology or additional service with your provider to ensure internet access during a disaster or emergency. I had a friend in an emergency situation for 2 weeks during the Hurricane Sandy disaster and their biggest regret wasn’t have solar charging pads for their i-phones. There was a line at the City Hall to just charge phones so people could contact family members and get support.
- Back up Power. Consider a backup power source for your business if having power during a 2-3 day emergency is critical for your inventory or product. Do you even have battery back-ups for all of your computers or servers? Test them regularly.
- Supply Kit. Finally, prepare a box of supplies for the office in the case of any type of emergency, not just a disaster. Similar to an Emergency Kit you may have at home for your family, a Supply Kit would be there for the office staff if you had to leave the office and evacuate with your employees. This may require a small investment but could help you get your business up and running more quickly after a disaster. Helping your employees in a disaster will help your business tremendously on day two or three.
To learn more about the Disaster Assistance Program provided by the SBA, or the Disaster Planning Guide, visit www.sba.gov, or call 1-800-659-2955. To download a copy of the guide click here- http://www.nationwide.com/pdf/disaster-plan-business-guide.pdf
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Mark J. Kohler is a CPA, Attorney, co-host of the Radio Show “Refresh Your Wealth” and author of the new book “The Business Owner’s Guide to Financial Freedom- What Wall Street isn’t Telling You” and, “The Tax and Legal Playbook- Game Changing Solutions For Your Small Business Questions”. He is also a partner at the law firm Kyler Kohler Ostermiller & Sorensen, LLP and the accounting firm K&E CPAs, LLP.