We’ve seen a lot of disasters happen in the U.S. in recent years.
Nearly two weeks after the storm made landfall, residents in the Southeastern part of the U.S., mainly the Carolinas, are still facing the effects of Hurricane Florence. In the Merrimack Valley in Northern Massachusetts, residents and business owners are still trying to get back to business-as-usual following more than 80 freak natural gas-related explosions and fires. In California, residents are still contending with deadly and destructive wildfires across the state.
In the wake of these horrible events, the importance of contingency and disaster planning for business owners is clear. It’s something that needs to be on the forefront of every business owner’s mind.
Beyond naturally occurring events, businesses face other risks on a daily basis. Some of these include:
In the face of these risks, there are many facets of risk management that need to be addressed, including:
Having a plan in place and being able to put it into immediate action can mean the difference between staying open or closing your doors should disaster strike. Let’s look at some of the ways that business owners can start to prepare their businesses for unforeseen disasters.
It’s critical for businesses to identify and quantify the risks they have and develop ways to mitigate them. Some of the key questions you want to answer include:
Once you answer these questions, you’ll want to develop written policies, procedures, and training programs that can be used by your whole team. In order to do this:
It’s easy to focus on (and become anxious about) the possibilities of major disasters. But it’s more likely to be a minor disaster that can be catastrophic for your business, such as a water main break that destroys your technology infrastructure, a fire that destroys all of your company’s inventory, a critical equipment failure, or an employee who embezzles money. A sharp decrease in business is always a real possibility.
You want to make sure you’re prepared. Planning is essential for your survival.
Almost 40% of small businesses never reopen their doors after a disaster, according to the Federal Emergency Management Agency (FEMA). Even more disheartening, according to AON, a provider of risk management products, 80% of companies that fail to recover from a major disaster within one month will go out of business. If you don’t want your business to become one of these statistics, it’s time to start planning.
Here are a few helpful resources from the IRS:
IRS’s Disaster Resource Guide for Individuals and Businesses https://www.irs.gov/pub/irs-pdf/p2194.pdf
Tips for Individuals Who Need to Reconstruct Records After a Disaster
https://www.irs.gov/newsroom/tips-for-individuals-who-need-to-reconstruct-records-after-a-disaster