Merchant Advance Blog

Blog Article: Small Business Disaster Preparedness

 

For many, there is no fear greater than losing one’s hard-earned property, home, or livelihood to some form of disaster, be it natural or manmade. And yet, these types of events do happen – and can happen to anyone. Recently, strong earthquakes in California left many of the region’s independent wine producers faced with heavy damage to their facilities and products. These small independent businesses, often sharing space and equipment and making use of forward-thinking business solutions like crowdfunding, will now face significant hurdles.

Small business disaster preparedness should be a part of any entrepreneur’s plan for financial security and future stability. Read on to learn more about how your business can prepare (and, if necessary, rebound) if or when something really, really, unreasonably bad happens.

Physical/Natural Disasters

These can cause significant damage to fixed assets and inventory, as well as the property on which your business is located. In areas affected by natural disasters, recovery of the local economy (often driven by small businesses) can be crucial to the re-establishment of overall community health. The information below, from the Public Entity Risk Institute, outlines some key points on preparedness.

Many businesses, especially small businesses, do not have adequate internal financial resources to cover… post disaster needs. Business owners often invest all their available resources in starting or expanding the business…
The best time to plan for post disaster financial needs is before the disaster. A business that plans in advance makes better decisions because it has more time to analyze its critical financial needs and evaluate its options. It does not have to identify, evaluate and pursue potential funding sources while coping with the other personal and business effects of the disaster…
Businesses can plan for post disaster financial needs in several ways. The business can purchase commercial insurance, which promises to pay the business for a covered loss in exchange for a premium. Businesses can also self-insure possible losses from disasters, relying on their own internal resources to meet post disaster financial needs. A line of credit arranged in advance can provide businesses with access to needed funds after a disaster.”
 

Some governments will also respond with financial aid for small businesses in the event of a disaster. In recent years, flooding in much of Alberta prompted the provincial government to enact specific Disaster Recovery Programs for small business owners that covered uninsurable damage, loss and other expenses.

In short, there’s no time like the present to make financial preparations that could help your business recover from a disaster. Think of these provisions like the ones stocked in an emergency first aid kit: they exist, providing assurance in the back of your mind. You won’t have to think about them unless they should suddenly become absolutely necessary – when their presence could go a long way to helping your business recover.

Digital Disasters

As threatening as the idea of having a business incinerated or swallowed by the earth may be, there is an arm of modern small business disaster management in particular that has addressed one of the concerns even more fearful to the 21st century business owner than the wrath of the angry Earth: loss of critical data. Your intrepid blogger has had this happen to him, and it was not pretty even in a relatively small potatoes situation: try explaining to a client that their whole project didn’t exactly back up correctly and is now… not there anymore? This is not, and should never be, something that any small business owner wants to do. Aside from what we’ll term acts of God, data loss may be the biggest and most serious disaster a business might encounter. Fortunately there are many ways to avoid, or mitigate, the damage and downtime that a corrupt drive – or a flood wiping out a critical server – might do to your business.

  • Make backups. Make multiple backups, and store them in offsite locations to lessen the likelihood that one incident might destroy them all. This is especially true for small businesses without an extensive or heavily complicated computer architecture. If you own a Mac, the absolutely stellar program Carbon Copy Cloner is the be-all-end-all excellent tool for this purpose. If not, numerous other similar types of programs exist for the Windows platform. Focus on the data that exists only in your records, such as customer and staff information, as opposed to data you recover from other sources. You can also investigate a myriad of business-specific cloud computing solutions that will store your critical data on offsite servers, for recall at a later date if something does go wrong. 
  • Remember this insightful observation!

    “[Businesses] need to realize that disaster recovery is not a synonym for data backups,” says Tim Singleton, president of Strive Technology Consulting in Boulder, CO. “A backup is a copy of your data that’s been stored somewhere safe. Disaster recovery is a plan for recovering that data, plus all the hardware lost in the disaster, and returning it to a reasonably functional state so that you can do business.”

The Last Word: Communication

Out of all the resources that can be provided and made use of in the event of having to go through any kind of disaster or disruption, perhaps the single most important one has nothing to do with material goods, insurance, backups or anything of the sort. What we mean is that external communication with your customers, undertaken as quickly and comprehensively as possible, is an incredibly important goal during any kind of disruption to your business. Not the least of these methods of communication is through social media: use the outlets to which you are connected to broadcast information, helpful news, timelines for a return to business as scheduled, etc. in order to rally with the community of people who pay close attention to your business’ goings-on. Transparency and consistent information are key strategies that will make sure no one is left in the dark or assumes the worst about your business as it works through any kind of difficult circumstances.

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