With predictions of an active hurricane season ahead, small-business owners should be reminded that creating a strong disaster-preparedness plan is crucial. Such a plan will help protect both owners and employees while ensuring that a business can bounce back as quickly as possible after a disaster strikes. This is important not just for those in hurricane-prone regions. It’s important for small businesses everywhere.
The recent floods in Rhode Island should be a wake-up call for every business owner. Businesses that never had water damage in the past were put out of business this year. This was not like anything we have experienced here in decades. In fact, the experts have called it a 200-year flood.
Charles Reade, president and CEO of Reade International in East Providence, is an excellent example of how businesses can prepare for the unexpected. Reade has updated his business- continuity and disaster-recovery plan every year since the 1970s. He uses the SBA disaster recovery plan on the agency’s Web site (http://www.sba.gov/services/disasterassistance/disasterpreparedness/index.html) as a guide.
Reade’s plan includes identifying critical business functions and how quickly they must be recovered; storing records offsite; assigning responsibilities to employees; and making certain every employee knows the plan and what to do if disaster strikes. Multiple and reliable methods of communication with employees have been established to make certain every employee can be accounted for and is safe.
A man-made or natural disaster could strike any business at any time. It could be an earthquake, flood, tornado or fire. It could be a widespread power outage. It could be the shutdown of a local transportation hub or something as basic as a sprinkler malfunction that destroys inventory.
A recent survey by Agility Recovery Solutions shows that about 75 percent of small-business owners had a plan to get employees back to work in the days after a business interruption. About 28 percent said they had access to alternative office space. America’s small-business community needs to build on those numbers and find new ways to prepare for whatever might come our way.
There are several simple, low-cost steps that small-business owners should take:
• Calculate how much money you might need in reserve if you had to shut down for a day, a week, a month or longer.
• Brainstorm a list of tough questions ranging from, “What’s the biggest disaster risk in my neighborhood or my region?” to “How would I contact my staff if wireless service is down?”
For a small business, closing for just one day can often mean huge financial losses. Last year alone, the SBA approved more than 3,300 business disaster loans totaling $372 million. During the recent presidential disaster declaration here in Rhode Island, SBA approved more than $8 million in disaster loans to more than 100 businesses.
We’re proud to meet our mission of providing this assistance to business owners, especially when we know that they’ve followed a disaster-preparedness plan that has positioned them to rebound, rebuild and start contributing to their local economy once again.
And bouncing back from a disaster can be much easier if small-business owners take more proactive steps to protect key assets and maintain continuity of operations as much as possible, including:
• Having a disaster communications plan, including a designated spokesperson who can keep customers informed about the status of business operations and plans for reopening.
• Contacting your insurance company to find if you are covered for various kinds of disasters. Many small businesses choose to buy “business-interruption insurance,” which covers operating expenses like payroll and utility bills in the event of an unexpected shutdown.
To help small businesses with their preparedness planning, SBA has teamed with Agility Recovery Solutions to create an online continuity-planning workshop called “Prepare My Business.” Small-business owners can access helpful tools, such as this month’s webinar titled, “10 Steps to Business Preparedness.”
As small businesses are leading America’s economic recovery, many of them are investing time and money into their plans to grow and create jobs. Developing a strong disaster-preparedness plan should be a critical and integral piece of those efforts. •
Mark S. Hayward is the district director for the U.S. Small Business Administration, Rhode Island District Office.
