It’s not news that “unprecedented events” seem to be happening more frequently than they ever did before. From natural to man-made disasters, and from physical to digital, we now are conditioned to expect them.

But expecting them isn’t the same as preparing for them.

According to the Federal Emergency Management Agency (FEMA), 40% of U.S. businesses don’t reopen after suffering a disaster. Another 25% fail one year later.

Over 90% of companies fail within two years of being struck by disaster.

~FEMA

Although there is no way to make your business disaster-proof, you can make it disaster-ready.

In addition to having a well-thought-out business continuity plan and adequate insurance, there are ways to mitigate the damage and reduce disaster-related downtime.

Run a Business Impact Analysis

Do you know how severely a disaster could affect your business? Have you figured out how much money you’d lose if you business had to stop? What about the extra expenses that inevitably accompany disasters?

The truth is that even small-scale, localized disasters can bring your business to its knees. Adequate disaster preparation involves knowing these variables up front. And it’s pretty easy to conduct.

Ready.gov recommends you provide managers and others in your business a questionnaire to fill out. It should ask for details on how the business operates, and the possible effects if a business function or process is interrupted.

Not only will you be able to document the expected outcomes of business disruption (such as lost sales and income), but you’ll be more aware of consequences you might not expect (such as contractual penalties or new business plan delays).

Develop a Disaster-Ready Plan

A disaster-ready, or business continuity plan can help any-sized business plan for the unexpected. They answer the critical who, what, where, when and why questions that every disaster generates.

  • Who calls employees?
  • What should employees do?
  • Where should people go, during and after?
  • When should certain tasks (like communications) be performed and in what order?
  • Why are the plans in place — what priorities do they uphold?

A business continuity plan thinks through logistics like that so you don’t have to. Particularly in the moment. It identifies the people in charge, and documents the types of decisions that should be made and the processes people need to follow.

Maybe most importantly, these plans give everyone the same set of instructions to follow, so there’s little guesswork at a time when you can least afford it.

Train Staff to Be Disaster-Ready

Personal safety experts have long advised that, if you were going to buy pepper spray, buy two sets — one to (hopefully never) use and one to practice with. The reason? If you fell victim to an attack, you couldn’t say, “Hang on a minute, let me read the instructions on my pepper spray.”

Similarly, a disaster is not the time for you to discover that you forgot one key process in your disaster recovery plan. Most experts recommend testing at least annually.

And that makes sense, particularly for companies in growth mode. In a year, lots can change. Employees come and go. Tools and systems fall in and out of favor. Responsibilities evolve. Annual training surfaces important details that can be easily overlooked if your plan is only on paper.

Should the Unthinkable Happen

Assess the Damage

When your business falls victim to a disaster, immediately take stock of the damage. Review your business property, equipment and inventory. Determine whether critical financial records are damaged, and if you can replace or regenerate them.

Before disaster strikes, create and maintain digital backup copies of every important business and financial document. These backups should include employee, customer and supplier lists. Ideally, backup your records on a cloud-based program instead of servers at your business.

Because after all, anything housed at your business would experience the same disasters your business experiences. Fires don’t politely stop at the door to your server room.

Consider Relocating

Depending on the disaster’s nature and scale, you might need to relocate. If working from home isn’t an option, unaffected peers may open their facilities to you to conduct operations or house inventory, at least temporarily.

Or, you might consider contacting a disaster recovery company. These companies can provide temporary trailers equipped with basic business equipment to keep you running until you can return to your permanent facilities.

File Insurance Claims as Soon as Possible

Contact your insurance provider as soon as possible in the recovery process. The sooner you file, the sooner you’ll likely receive the funds needed to restart operations.

But don’t wait until a disaster strikes to discuss coverages with your insurance agent. Do it now. You’ll feel more confident you’ve got adequate coverage. And you’ll be able to make critical decisions when needed, using a solid understanding of claims procedures and processes.

Maintain Contact

Maintaining communication with your employees, customers and suppliers is critically important.

  • Make sure you have current records that include alternative contact details.
  • Keep a database of alternate suppliers in the event your primary suppliers can’t serve you. If your business will be out of commission or operating from temp facilities for a prolonged period, alert suppliers to either hold or reroute shipments.
  • Keep customers informed about your situation. Otherwise, you run the risk they may take their business elsewhere. Let them know what they can expect and how to contact you through every step of the recovery process.

If said disaster brings hardship to your customers, reward their loyalty. Consider offering them a one-time discount on current or future orders.

As the saying goes, “an ounce of prevention is worth a pound of cure.” Being disaster-ready can make recovering from a disaster less stressful and less costly for your business.

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