July 18, 2013 Money en_US https://quickbooks.intuit.com/cas/dam/IMAGE/A6K0pyO1T/992e9201d755870bbbfe6407b4b8d16c.jpg https://quickbooks.intuit.com/r/money/dont-let-the-next-natural-disaster-put-you-out-of-business Don’t Let the Next Natural Disaster Put You Out of Business

Don’t Let the Next Natural Disaster Put You Out of Business

By Robert Moskowitz July 18, 2013

Natural disasters — fires, floods, sinkholes, hurricanes, tornadoes, earthquakes, tidal waves, swarms of locusts, or worse — have affected more than 30 percent of U.S. businesses.

So while they may sound rare, the odds are fairly high that your small business will one day square off with Mother Nature. When it does, she’ll likely cause short-term disruptions and may wipe out your operation completely. (The SBA estimates that more than 90 percent of businesses fail within two years of being struck by disaster.)

The good news: Your company can survive a natural disaster by preparing for one ahead of time. Here are some tips for doing so.

Line Up a Temporary Place to Do Business

Scout potential locations for conducting business in case your primary location can’t operate post-disaster. Make sure the backup site can accommodate any employees, customers, and partners who need to be present. Depending on circumstances, you may find it worthwhile to reopen temporarily in a hotel or a warehouse on the outskirts of town, just so you can resume operations immediately while you search for longer-term digs.

Be open to splitting your operation into a small, readily accessible “showroom” for necessary visitors and a secondary, cheaper “back room” where you can handle accounting, communications, and other administrative tasks during your recovery period.

Because your business probably requires not only space, but also equipment, supplies, inventory, data backups, and more, develop a disaster plan in advance to preserve what you can and obtain whatever else you need to reopen ASAP. It’s also helpful to think about what your business does to survive — consult, sell, plan, report, manufacturer, distribute, or whatnot — and prioritize its most critical business functions. This way, when disaster strikes, you can work to restore the most important parts of your operation first.

Prime Your Customers and Employees

Even when it’s running perfectly, your business can’t survive unless your customers know where to find you and what products or services you can provide them. After a disaster, getting the word out becomes central to your business’s recovery.

The best time to circumvent potential problems, of course, is before disaster strikes. For example, prepare a business card or flyer describing where you expect to be operating and what you expect to be able to offer that you can quickly update, print, and disseminate if disaster strikes. If you haven’t done so already, post your company’s emergency contact information and alternatives for placing orders, obtaining products and services, and making payments on your website and social media pages.

Your employees also need to know what you expect from them during and after a disaster. How much time can they spend with their families before you’ll need them back at work? How can they reach you to coordinate work schedules and assignments? Try to establish a method for communicating, such as LiveProfile or Google+ Hangouts, that doesn’t rely on your company’s email server.

It’s helpful for your employees to know your business’s emergency plan — and it’s even better when they help you prepare one. They may find weaknesses in it that you’ve overlooked. And participating in developing a plan usually increases their motivation to see that it works.

Get Ready to Prove What You’ve Lost

Insurance is helpful in putting a business back together after disaster strikes. But insurance companies generally only pay for what you can prove you’ve lost. You can document your holdings by shooting a video. Walk through your business premises once or twice a year with the camera rolling. Record each and every thing that’s inside every room, drawer, and cabinet. Store the video on the cloud or on a backup drive that’s kept offsite, where it won’t get ruined in a disaster, too.

Protect Your Paperwork and Your Finances

Speaking of backups, disasters are a little less disastrous when they don’t destroy your only copy of paper records, especially those concerning your finances. Try to reduce your dependence on checks, invoices, and other financial paperwork. Move your business’s records to a safe place — or be prepared to move them, as well as to make pending bank deposits, in the event of an emergency.

Having cash on hand also makes it easier to cope after a disaster strikes your business. How much money you’ll need depends on the size and type of your business. Try to have ready access to at least enough funds in the bank to cover two weeks of operating expenses, payroll, and the restocking of inventory and consumables. (If your budget allows, stockpile more.)

You may also want to consider obtaining a spare credit card or two to help cover emergency expenses in the immediate aftermath of a natural disaster.

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Robert Moskowitz is a writer with a passion for solving small business problems. Read more