Natural disasters are all around us. It is absolutely astonishing how the weather patterns are changing and the impact they are having with storms and even the likelihood of fires. Right now it is flooding, but what could it be next.
With that said, if 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 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 Moto: “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:
- 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.
- Maintain all business records (client lists, accounts receivable, accounting records, data, etc…) on a ‘cloud server’ or have some sort of off-site back-up system with redundancy.
- Keep records on Employees, Customers and Vendors so you could re-start your business quickly if needed and have an offsite back up as well.
- 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.
- 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.
- Make sure you review your insurance policies on a regular basis and ensure you have the right type of insurance in effect.
- 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.
- 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 insure internet access during a disaster or emergency.
- Consider a back-up 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.
- Finally, prepare a Supply Kit 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
Mark J. Kohler is a CPA, Attorney, Radio Show host and author of the new book “The Tax and Legal Playbook- Game Changing Solutions For Your Small Business Questions” and “What Your CPA Isn’t Telling You- Life Changing Tax Strategies”. He is also a partner at the law firm Kyler Kohler Ostermiller & Sorensen, LLP and the accounting firm K&E CPAs, LLP. For more information visit him at www.markjkohler.com.