Is Your Small Business Prepared for Disaster?

Feb 05, 2014

In the last year we have heard unexpected business disasters in the news range from the 2013 Calgary flooding that caused doors to close, to a Medicentre laptop stolen with sensitive data files of 620,000 Albertans. A new business was destroyed by a fire in Keremeon B.C. early Monday morning this week.

About one-third of small business owners have a disaster plan, a 2012 study by Sage reports. Business owners who lack a plan either haven’t thought about it, don’t think it is important or feel that disasters are rare in their area. Unfortunately, 25 percent of businesses do not reopen after a natural or man-made disaster, according to the Institute for Business & Home Safety. Keep your business going strong after a disaster with these strategies:

What May Hit

Plan and prepare for all types of disasters:

  • A natural disaster: tornado, earthquake, hurricane
  • A man-made disaster: robbery, data breach
  • Emergencies: fires, floods and building collapses

PrepareMyBusiness.org offers comprehensive planning tools for the threats listed above, as well as others. Use their resources to work through risk assessments, plan and pack a disaster recovery kit, develop a communications tree and brainstorm ways to stay protected in the event of a natural disaster like a hurricane.

Data loss

A hacker could cause a system failure, or a hurricane or fire could destroy everything. If you’ve backed up all your files, you can be up and running again quickly. If you haven’t backed up your data, you’ve just lost all your valuable business resources—and you may not recover from this.

To protect your business, develop and use a regular backup for all business data. External hard drives have come down in price, so you can find an affordable hard drive that offers terabytes of data. Unfortunately, many businesses only back up in the office. While that’s convenient, it means you still risk losing your data should the office experience an unexpected disaster. To take all safety precautions, consider signing up for cloud-based backup like Mozy online backup in addition to using an in-office backup.

Not paying accounts on time / getting a bad reputation

Human resources, payroll and accounts receivable are important to stay on top of, since they tie directly to legal issues and regulatory agencies. You’ll also need these documents (preferably in a digital format) should a disaster hit your area.

As a first step, list out all of the accounts you need to pay and when bills are due, checking in with other departments as necessary. If you’re the one writing the checks, use a calendar to keep track of bills or consider automating payments for certain regular expenses (office utilities, supply orders etc.) through your bank account. If you don’t write the checks, consult with the business manager to develop a strategy for paying all accounts on time.

Purchase insurance

You may think that if you’re an honest businessman, you’re safe. However, without liability insurance you may be held personally liable in a claim, such as a liability claim from a client who slips and falls at your office. Legal fees and settlement or award costs could bankrupt your business. As a business owner, you may need liability insurance, property insurance, auto insurance, workers’ compensation insurance and other coverage. A business owners’ policy often offers comprehensive small business insurance. Talk to your insurance agent about business coverage to make sure you’re protected at a reasonable level.