MONTGOMERY, Ala. -- The small business that prepares in advance of a disaster like Hurricane Katrina has a greater chance of returning to pre-disaster operating levels if it suffers damage from the event. There is no better reason for a business owner to look seriously at being prepared for a disaster, says the U.S. Department of Homeland Security's Federal Emergency Management Agency (FEMA).
"A disaster-ready business will be able to recover faster and with less financial loss," said Michael Bolch, federal coordinating officer for FEMA. "Small business owners can suffer water or wind damage even if the event does not warrant a federal disaster declaration."
There are four critical parts to disaster preparation:
- Make your company's physical plant less vulnerable.
- Ensure your business data (sales records, customer lists, tax information, etc.) is backed up offsite.
- Purchase adequate insurance coverage.
- Formulate a contingency plan to help you keep operating even if your company's location is heavily damaged or destroyed.
The internet is full of information about how to protect your business. The website, Institute for Business & Home Safety ( www.ibhs.org ), includes a section on protecting against hurricanes, hail, tornadoes, earthquakes, floods, wildfires and freezing weather.
The FEMA site ( www.fema.gov/mit ) includes practical information on topics such as installing an emergency generator, protecting wells against contamination from flooding and securing different kinds of roofs.
The U.S. Small Business Administration's site ( www.sba.gov/disaster/getready.html ) contains disaster preparation tips and also a list of things business owners should consider. The section includes some hard questions owners need to ask themselves, such as "What would we do if our facility were closed for several days, damaged or even totally destroyed?" and "What if my payroll, tax, accounting or production records were destroyed?"
When it comes to insuring your company, it's imperative to know exactly what the policy you buy covers and doesn't cover. Don't assume, for example, that a standard business policy will cover flooding. The chances are high that it won't, and that insurance for these kinds of disasters will have to be purchased separately.
It's a good idea to consider business interruption insurance that would cover your lost profits should you?or under some policies, your suppliers or customers?be unable to operate.
And if you can't operate? It's something you need to think about now. Is there a way you can carry on the business even if your location is damaged and destroyed? Obviously, if you're a manufacturer or a retailer, a business dependent on a particular locale, the answer might well be no. If you're a service provider, say, a medical billing company, you might be able to get back to work right away.
But you need to have two of the critical elements of disaster preparation: offsite backup of your company's data and a contingency plan. Knowing in advance what your options are can help you restart with as little delay as possible.