Is Your Small Business Prepared for a Disaster?

by QuickBooks

2 min read

Floods, tornadoes, earthquakes, and other natural disasters like Hurricane Sandy destroy everything in their paths, including businesses. Yet disaster recovery planning is something many small-business owners put off, opting to deal with more day-to-day issues first. It’s a decision that they may live to regret.

In assessing the damage done by hurricanes Katrina and Rita in the Gulf Coast states in 2005, U.S. Congress found that 43 percent of businesses that close after a natural disaster never reopen. Of those that stay open, more than 29 percent close within two years.

Any downtime can be debilitating. For example, each day of an IT outage costs small and medium-sized companies an estimated $12,500, Symantec estimates, noting that this figure excludes the impact of a company’s computers being down on customers.

If you don’t yet have a disaster recovery plan, now is a good time to start thinking about one. Here are a few tips to get you started:

  1. Get insurance. If you live in a flood zone, ask your insurer about the National Flood Insurance Program. If your business may be hit by an earthquake, purchase a policy for that, too. Some states even have mine subsidence insurance to protect against sinkholes and water damage caused to buildings constructed on top of mine shafts. Be sure to check with your insurer to determine how much protection you’ll have under your regular policy for “acts of God” or other weather-related events, including hail, wind, and tornado damage.
  2. Have a Plan B for personnel. If the worst happens and your building is uninhabitable, your employees will need a place to work. If they can do their jobs from home, be sure each employee has the ability to connect to your servers from home. If your business has an office in another area of the city or region, come up with a contingency plan that allows them to share office space while the damaged office is repaired or rebuilt.
  3. Back up your data. Another reason many small businesses are switching to cloud-based storage is that their files are backed up at a secure location, keeping essential data safe. In the event of a natural disaster, all you’ll need to access information is the proper hardware and a network connection — and you’ll be back up and running. If you have servers on-site, it’s crucial to back up your files off-site each night to avoid a major data loss.
  4. Prepare to replace equipment. After any disaster, it’s important to replace any computers or machinery you’ve lost as quickly as you can. In some cases — floods, for instance — you may find your equipment survives intact, but a tornado or fire can wipe your gear out completely. Prepare to purchase enough equipment to resume daily operations as soon as possible after a disaster occurs.
  5. Make sure you can forward calls. If your business is closed, how will your customers be able to reach you? Make sure your telecommunications plan includes the ability to forward your phone calls to designated cell phones or a remote location if the need arises.

Although your small business may never endure a natural disaster, implementing a disaster recovery plan will protect you from the unexpected (and is a sound business practice). Remember: Symantec found that 65 percent of small- and medium-sized businesses are prone to disaster. Don’t let yours become a statistic.

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