Creating a Disaster Plan to Protect Your Small Business

Many people make the decision to go into entrepreneurship every year after hearing the success stories of friends and family members. However, even the best business ideas can be ruined due to unexpected emergencies and disasters.

Once you have made the decision to expand upon your passion for beading and designing jewelry, creating your business plan may be the next step. After priding yourself on analyzing your finances and resources, you may still be missing one key thing: an emergency plan.

Approximately 25 percent of small businesses that close as a result of natural disasters or emergencies do not reopen, according to the U.S. Small Business Association. Many entrepreneurs who are new to the industry fail to look at the grand scale of their business. Ensuring your company's success involves looking at both the good and the bad. This means examining all potential outcomes as a result of the economy, consumer trends and Mother Nature alike.

To effectively prepare for an emergency, think realistically. Cutting corners when creating a disaster plan may result in a lack of resources when it comes to the unthinkable. First, determine what type of disasters your small business is prone to based on your region. If you live in the south, your company may be susceptible to tornado damage. If you live on the west coat, you might be at risk of an earthquake. After determining the likelihood of certain disasters striking your business, you can begin to develop a plan.

If your company is located in Tornado Alley or along the eastern seaboard where hurricanes can occur, figure out how you will contact your employees before and after a disaster to discuss the status of the business. It may also be helpful to assign one worker to the task of keeping track of tornado and severe storm warnings.

Natural disasters can sink small businesses.

Prepare your business for a big storm by planning to unplug all equipment and shut off all water during a natural disaster. If you receive news ahead of time that a large thunderstorm will be approaching, such as a hurricane, board up your windows with plywood to protect them from damage. Evacuate all vehicles prior to the storm for safety purposes as well. Remove any outdoor advertisements, such as signs and decorations, to prevent damage.

If your small business is in an area that is prone to hurricanes and tropical storms, chances are that it's also at risk for floods. It's in your best interest to protect your company by investing in flood insurance to pay for any damage that may occur as a result of this type of natural disaster.

Keep in mind that most standard insurance policies do not include flood protection. Ask for details on this type of policy from your agent for adequate coverage.

Take matters into your own hands when your small business is in a region that has been issued a flood warning. Move items that are located in the lower level of your building to higher ground. Make sure your electronics are not placed on the ground, such as radios and computers. Flood waters can cause permanent damage to this type of equipment.

If your business is at risk of suffering from an earthquake, the SBA says it's important that you make sure your office location is up to code. A building that is retrofitted to withstand earthquake tremors is more likely to endure less damage. When arranging equipment at your small business, take the proactive measure of fastening your desks and cabinets to the floor. This can prevent tipping in the event of an earthquake. Make sure your drawers are lockable and can be manually opened as well.

The SBA recommends using flexible water lines and natural gas connections in earthquake-prone regions. This can reduce repair costs to your building after a natural disaster. Taking this advice into consideration can increase the safety of you, your employees and your small business.

An efficient disaster plan should include a designated shelter location in your building for employees and evacuation rules. In the event that you are not around when a disaster strikes, you must also designate an individual to take control during an emergency. Doing so can prevent injuries as a result of employees going into panic mode.

Make a plan to protect your investments in addition to your physical workplace as well. The SBA recommends storing customer files at an off-site location in the event of an emergency and keeping a contact list of alternative suppliers. It can also be helpful to keep an inventory of your stock to assess your losses following a natural disaster. The SBA stresses that keeping a disaster plan intact may reduce the amount of time and money you put into the recovery process.