Keeping your business open after a disaster requires planning now
Many small businesses fail to reopen after a natural disaster, and even something that knocks a business out of commission for a short time can have a devastating effect. According to National Federation of Independent Businesses (NFIB) poll, at least 30 percent of small businesses have been closed 24 hours or longer in the last three years due to a natural disaster. While most impacts from natural disasters are modest, two to three percent of small businesses have experienced an extreme impact over the past three years, says the NFIB. An extreme impact shuts down a business for at least a week or brings damage of $100,000 or more. Would your business survive a week-long closing?
If the threat of a large-scale disaster doesn’t motivate you to create a business continuity plan, would the more likely reality of a three-day power outage do it? Say that your business depends primarily on one supplier, and something goes wrong at their headquarters that affects you. Got a backup plan for that? Some business owners purchase a business interruption insurance policy, yet fail to recognize that since the coverage is tied to their property insurance, it applies only when there is direct physical damage to the building. A contingent business interruption policy extends coverage to include lost income as a result of property loss at a key supplier. Having the right business insurance protection will keep your business viable.
There are many free preparedness resources especially for small-business owners.
- The Insurance Information Institute has business inventory software that can help you purchase the correct type and amount of insurance.
- Monthly webinars are hosted by the U.S. Small Business Administration and Agility Recovery Solutions, including one on hurricane season preparation scheduled for June 21. Check out www.preparemybusiness.org. There are also preparedness tips for businesses, homeowners and renters on the SBA’s website.
- The Insurance Institute for Business & Home Safety has an “Open for Business” toolkit available to give you business survival confidence.
- The American Red Cross Ready Rating program is a self-guided program to help businesses, organizations and schools assess their level of preparedness for emergencies.
Luck favors the prepared, so……make yourself lucky.