Natural disasters like the tornadoes of Oklahoma, Hurricane Sandy, earthquakes, floods, and fires, make small businesses particularly vulnerable if they are not ready when disaster strikes. Such events can wipe out a small business, but having a contingency plan can help get things up and running sooner, while limiting losses.
What is a Contingency Plan?
Think of a contingency plan as your “Plan B.” Such a plan takes into account risk management and formulates an idea to set up business continuity if a natural disaster hits. It includes specific steps for how to restore and back data up, while putting in place a set of rules to follow.
The first step determines which types of disasters to plan for. For example, businesses in areas prone to hurricanes should consider plans for protection against high winds, flooding, long-term power outages, and a strategy for how to protect vital records.
Determine a Communication Strategy
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Create a communication strategy to follow while business operations are down. Outline communication responsibilities for every employee. This would include items like who will contact clients with updates, who will be deal with the insurance company, and who will be the spokesman for the company.
Data Backup of Important Files
The backup of important files is crucial to getting your business back on its feet. If critical financial and client data is lost, a company may not be able to recover. Mobile and cloud computing technologies are the best option for backing up because files can be accessed from any mobile device no matter where you are.
Online backup also keeps files safe even if your building is totally blown away. When backing up, be sure to protect information related to any current projects, too. This will make reduce downtime, in the case of smaller interruptions, such as power outages.
The general mindset is that natural disasters happen elsewhere, but businesses should have safety procedures in place. Safety rules should include an emergency communications plan. With today’s technology an automated communication system works well to keep employees alert and up-to-date.
For those who live in tornado or earthquake prone areas, safety procedures should include precautionary measures designed to keep employees as safe as possible.
Check Insurance Coverage
Along with wind, flood, and fire insurance, it pays to carry business interruption insurance to cover the time it takes to get your business up and running following a natural disaster. Even with insurance, it can take two years to rebuild. Talk with your agent and find out what is covered. Typical policies do not cover flood or earthquakes.
Also talk about deductibles and limits, because in some cases there could be limitations on what the policy will pay for certain items. Overall, insurance policies should cover property, business interruption, and extra expenses over and above normal operating expenses.
Natural disasters present many possible scenarios. The contingency plan goal should make everyone in the company aware of what to do in the event of a disaster. This includes understanding emergency operating procedures and who they should contact.