What Small Business Owners Need to Know About Natural Disaster Recovery

tornado destructionNatural disasters have a big impact on small businesses, especially cash-strapped start-ups.

Not only will the business suffer, but the livelihood of the employees will be jeopardized as well.

And what’s more, roughly 40% of small businesses that were affected by natural disasters will never reopen, according to the American Red Cross.

Your business doesn’t have to be a statistic. With a little preparation, you can make your business’s chances of recovering from a natural disaster dramatically higher. Here’s what you need to know.

Pre-disaster plan:

This should start from the business’ inception, and not after the disaster has occurred.

Small business owners should take certain steps from the very beginning to minimize the risks once a hurricane, flood, fire, earthquake, or other natural disaster strikes.

Invest in proper disaster planning. You can take a small step to this by insuring your business.

Some insurance policies will not cover damages caused by natural disasters unless the business owner requests for such to be added. Be sure that the most likely natural disasters in your area are covered, and include looting in your insurance coverage as well.

Post-disaster plan:

1. Activate your business’ natural disaster emergency plan

The goal of the emergency plan is to minimize the damage caused by the natural disaster to the business and to the employees as well.

Start by checking the status and concerns of your employees. Are they all okay? Are their loved ones safe and unharmed?

2. Develop a communication strategy

One trusted employee should handle the communication with the natural disaster relief services, suppliers, and financial institutions.

Always have a back-up communication system ready in the event that the first one breaks down.

3. Keep your data safe

Natural disasters will disrupt the system within your business. The U.S. Chamber of Commerce Foundation believes that it is extremely important to have a back-up of your business’ files – better if it’s done in more than one location, including a cloud-based storage company like Dropbox or Google Drive.

4. Ask help from a restoration expert

A restoration company will come to your aid as soon as possible in order to minimize the business’ loss.

Aside from fixing the damaged areas of your establishment, an exemplary restoration company will help you get the best value out of your insurance coverage.

5. Consider Filing an Insurance claim

Examine your insurance policy. Make sure that there aren’t any gaps in it. Are the additional damages covered by your insurance? What are your deductibles?

small business owner rebuilding after business was damaged in a natural disaster

Disaster Loan Assistance

Do not lose hope. There are various government agencies and organizations that will help you recover.

The U.S. Small Businesses Administration, for one, helps small businesses get back on their feet through their Disaster Loan Program.

The SBA offers a low-interest loan that can be used for fixing the business’ damaged property, restocking supplies, and other business assets.

Get in touch with your local Small Business Development Center once the dust settles. Their professional staff will help ease your transition into the recovery phase. It’ll be far easier to recover from a crisis when you get the right kind of help.

Preparation is Vital

No business is immune from natural disasters or natural disaster-related losses. Being well prepared is the key to a better recovery process.

Preparedness should be strongly embedded in all areas of the business with emphasis on how the recovery process will be approached. With the right recovery plan, tools, and help, your business’s chances of truly recovering will be much greater.

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