In recent years, events like the 911 terrorist attack and Hurricane Katrina have caused businesses to re-evaluate their disaster preparedness. The truth is that even smaller-scale disasters caused by severe weather and power outages can bring your business to its knees.

The non-profit Institute for Business and Home Safety (IGHS) estimates that more than 25 percent of U.S. businesses that suffer a disaster-related closure never recover. For small businesses, the figures are even more alarming. The federal government estimates that 40 percent of small business forced to interrupt operations as the result of a large-scale disaster, like Hurricane Katrina, are forced to close their doors for good.

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 contingency plan and adequate insurance, the IBHS offers the following tips on how to mitigate the damage and reduce the impact of disaster-related downtime.

Assess the Damage

In the event your business falls victim to a disaster, you should immediately take stock of the damage to your business property, equipment and inventory. Determine whether or not there has been damage to critical financial records and whether or not they can be replaced or regenerated. You should always maintain backup copies of all your important business and financial documents including lists of your employees, customers and suppliers. Keep your backup copies safely stored in a remote location. Most experts agree that your backup location should be at least 50 miles away from your business location.

Consider Relocating

Depending on the nature and scale of the disaster, relocation may be a viable option. Relocation may mean temporarily working from home or another near-by location. In some cases, businesses within your industry that have not been affected may allow you to conduct operations or store inventory at their facilities temporarily.
If neither of these options is available or suitable, you may want to consider contacting a disaster recovery company. These companies can provide temporary trailers equipped with basic business equipment to keep you up and running until you can return to your permanent facilities.

File Insurance Claims as Soon as Possible

You should contact your insurance provider as soon as possible in the recovery process. The sooner you file, the sooner you’re likely to receive the funds needed to restart your operations. Don’t wait until a disaster strikes to discuss your coverage with your insurance agent. Doing so now will ensure that you have adequate coverage and can help you make critical decisions based on a solid understanding of claims procedures and processes.

Maintain Contact

It’s critically important that you maintain communication with your employees, customers and suppliers. Make sure that you have current records including alternative contact numbers. It’s also a good idea to keep a database of alternative suppliers in the event your primary suppliers are unable to serve you.  If your business is going to be out of commission for a prolonged period, or operating out of temporary facilities, make sure you alert your suppliers to either hold or reroute their shipments.

Unless you keep your customers apprised of your situation, you run the risk that they may take their business to a competitor. Let your customers know what they can expect and how they can contact you through every step of the recovery process.  If your customers experience any hardships as the result of the disaster, you might want to consider offering them a one-time discount on current or future orders as your way of rewarding their loyalty.

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

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