Disasters such as fires, floods, hurricanes, earthquakes and tornadoes can be devastating for anyone. They can be especially detrimental for small businesses that are forced to relocate, rebuild or close down when one of these events occur.
A recent survey of more than 500 small business owners conducted by Sage North America revealed that more than 60 percent do not have a formal emergency or disaster preparedness plan in place.
On the other hand, the survey, which was developed to examine how U.S. small businesses prepare for unexpected crises, revealed that 94 percent take steps to back up their financial data. However, six in 10 of those surveyed say they are storing their baked up data on site only.
"Backing up on-site may not be sufficient to protect small businesses from natural disasters - particularly if the business is located in an area prone to earthquakes, hurricanes, fires or flooding - or more common crises, such as theft or hardware malfunction," said Sage Small Business Solutions' Connie Certusi. "Data loss could have a serious impact on operations and crisis recovery. The development of a preparedness plan that includes solutions for protecting critical information, such us backing up off-site, could be the difference between getting a business on its way to recovery and worrying about its survival."
While the U.S. Small Business Administration (SBA) has approved more than 2,400 business disaster loans for $372 million over the past 18 months, officials say having a disaster recovery plan in place can help businesses recover more quickly, without taking on a lot of new debt.
Reviewing your insurance coverage is among small business advice the SBA offers to entrepreneurs creating a disaster recovery plan. Entrepreneurs should know their policy's limits and inquire about business interruption insurance, which compensates them for lost income and covers operating expenses if there is a temporary shutdown.
Additionally, the SBA suggests establishing a solid supply chain that includes vendors outside of your local area as well as planning for an alternate location if your primary office is damaged. This includes establishing a plan that allows employees to telecommute.
Entrepreneurs who want to develop a disaster plan for their small business can find information from the Federal Emergency Management Agency (FEMA) at Ready.gov. The SBA also provides resources for small businesses that wish to prepare for unexpected disasters at SBA.gov/Prepare.