There’s a good chance that your small business will be impacted by disasters at some point. Calamity comes in many varieties. On the natural side, you have tornadoes, hurricanes, wildfires, earthquakes, floods, and outbreaks such as COVID-19.
There are also human-caused disasters, such as terrorist acts, criminal acts, accidents, and technology or equipment failures. These events can happen just as suddenly as natural disasters, delivering severe blows to your business’s ability to operate.
Regardless of what causes a disaster, you are responsible for your reaction. Creating an emergency plan is like developing a road map. When the time comes to use this map, you’ll be able to follow the steps you’ve already outlined. Without such a map, you’ll be forced to fumble along and try to figure things out amid the chaos.
“Many small businesses protect themselves by incorporating,” explains a disaster preparation guide from Forbes. “However, companies should also understand how to protect themselves from natural disasters. Forces of nature, like major hurricanes and earthquakes, can have a deadly impact on a small company. It could take weeks, months, and potentially even years for a small business to get back up and running again after a natural disaster.”
It’s true that a disaster can cause severe damage to a business. Federal data suggests that more than half of small businesses are unable to survive the aftermath. In the grim math of disaster, each day a business is forced to stay closed adds to the likelihood that it will never reopen.
Putting Your Plan Into Place
Given these sobering statistics, it’s clear that you need a plan in place that helps you resume operations as quickly as possible.
“A good disaster plan means fewer days out of business, better communication with customers, and a better settlement from your insurance company,” says a small business guide from Business.com. “Add it all up and your plan could be the reason your small business beats the odds. Look, we know you have a long to-do list. But trustworthy government resources developed over the past few years have made putting together a disaster plan much easier than you’d think.”
So how do you put together an emergency plan? The experts at FEMA suggest starting by gathering information about the possible hazards you could face. Assess the associated risks and conduct a business impact analysis. This approach enables you to proactively look for ways to avoid hazards and reduce risks if they occur.
Next, you’ll want to come up with a proper emergency response. For example, how will you communicate during the crisis? And how will you ensure continuity of business? Laying out courses of action for incident management and employee assistance ensures that your team will be taken care of even if things get chaotic.
While having a plan is crucial, you’ve got to put it into practice to make it relevant during a disaster. You should hold drills at your business that allow you to evaluate your plan and test your team’s preparation. Schedule these drills regularly so employees can count on them occurring and will have the opportunity to master the various aspects of your emergency plan.
Once your plan is established, avoid the temptation to rest on your laurels. The revision process will be ongoing. Watch for areas of improvement during your drills and make adjustments wherever necessary.
Recovering From the Disaster
Your plan will bring comfort and clarity during calamity. In the best cases, your preparations can save lives and minimize destruction. But how do you then get back on your feet?
Here are 10 recommendations for your business from the US Chamber of Commerce:
- Implement your disaster plan. Assess damage and consider if a backup location is needed.
- Shift your team and leadership from preparedness to recovery.
- Implement a communications strategy to ensure that the facts go directly to employees, suppliers, customers, and the media.
- Encourage employees to take appropriate actions and communicate.
- Document damage, file insurance claims, and track recovery.
- Cultivate partnerships in the community with businesses, government, and nonprofits.
- Provide employee support and assistance.
- Connect with chambers of commerce, economic development, and other community support organizations.
- Document lessons learned and update your plan.
- Contact the Disaster Help Desk for support at 1-888-MY-BIZ-HELP (1-888-692-4943), or visit www.facebook.com/USCCFhelpdesk or https://twitter.com/USCCFhelpdesk.
Ample resources are available to help protect your business from unavoidable disasters and aid in the recovery. Start with the information provided by the Small Business Administration (SBA), then make time to check out the content available from FEMA, SCORE, and the Department of Homeland Security.
Financial Assistance Is Available
The coronavirus outbreak has brought challenges to every business in America, regardless of their preparation level. But help is on the way. The White House approved a bill that green-lights $50 billion for SBA disaster assistance.
“The president took bold, decisive action to make our 30 million small businesses more resilient to coronavirus-related economic disruptions,” explained SBA Administrator Jovita Carranza. “Small businesses are vital economic engines in every community and state, and they have helped make our economy the strongest in the world. Our agency will work directly with state governors to provide targeted, low-interest disaster recovery loans to small businesses that have been severely impacted by the situation.”
Of course, SBA loans aren’t the only financial products available to small business owners. What makes these loans unique is that they’re earmarked for those who have been rejected for other forms of credit. So if you are in this camp, you’ll benefit most from the recent addition of funds to the SBA.
Let’s take a quick look at a few of the most common financing routes a small business can take:
- Local Grants and Loans: Your state may provide grants, loans, and other programs to assist with your recovery. For example, California, Washington, and New York all have initiatives in place to help entrepreneurs impacted by the COVID-19 outbreak.
- SBA Economic Injury Disaster Loans: These loans are extremely popular for businesses that have been harmed by disaster. They provide amounts up to $2,000,000 and have generous repayment terms. Interest rates are 3.75% for qualifying businesses and 2.75% for nonprofits. There aren’t many usage constraints with these loans, so you can leverage the money to take care of all kinds of financial demands. Need to pay your employees? Cover bills? Resolve your fixed debts? It all falls within the scope of these lifesaving loans.
- SBA Business Physical Disaster Loans: In many cases, disasters inflict physical damage to a small business. For example, Hurricane Harvey damaged thousands of businesses with winds, storm surge, and floodwater in 2017. The SBA’s Business Physical Disaster Loans provide as much as $2,000,000 for your recovery.
With all the volatile and unpredictable factors associated with entrepreneurism, it’s important to have stability and consistency wherever possible. By creating an emergency plan, practicing it, refining it, and researching the financial resources available, you’ll be on steadier ground when disasters bring chaos. Your preparation will undoubtedly be appreciated by your employees, customers, and partners.