With all of the tasks and responsibilities of running your small business, disaster preparedness is probably not top of mind. While this is understandable, it is not prudent to neglect disaster planning. In any given year, one quarter of small companies will experience a “significant crisis” defined as power outage, flood, cyber breach, hurricane, or wildfire, according to the Association of Small Business Development Centers. The American Red Cross estimates that 40% of small businesses without a contingency plan do not reopen after a disaster occurs.

For the sake of your company, consider setting aside time to plan for disasters that may come your way. This work will pay off in saved time and money. It may even help to keep your company afloat.

Start by:

Identifying your greatest risks
To minimize the effort and maximize the payoff of disaster planning for your company, create a list of the crises most likely to afflict your company. For example, you may not need to plan intensively for wildfires, earthquakes, tornadoes, hurricanes or blizzards if you are not in an area that experiences these events frequently. On the other hand, floods can happen anywhere, as can power failures, fires, cyber-attacks and other events that can put your business at risk. Identify the greatest risks to your business and build your plan around them. 

Prioritizing actions required
At the top of most disaster preparedness lists is protecting people, property, information, equipment, inventory and customers. Identify your priorities and check your preparedness in each of these areas to determine what action you should take:

  • People. If you don’t have clear evacuation procedures in place for your business if a disaster strikes, work on these first. Check that emergency supplies such as flashlights are on hand and up-to-date. Create a meet up place outside of your business location to help you determine that everyone is accounted for if disaster strikes.
  • Information. Off-site back up is among the best ways to protect the information that makes your company run. Ensure that you run automatic backups at least daily, so you don’t have to think about this important task once you have set a service in place. Consider backups that capture all of your software and your documents so that you can easily “recreate” your work environment with minimal effort.
  • Equipment and inventory.Create processes for cataloging technology and inventory to ease the process of filing insurance claims in case of loss. If you have paper records such as old tax records that are important to your business, consider fireproof  containers or off-site storage.
  • Customers. In your plan, include how you will let customers know you have experienced a disaster. Also think through how you will reassure them that their information is secure. Keep key customer information in an off-site backup location that will be easy to access in an emergency.

Checking your coverage
Insurance is one of the most misunderstood areas of business management. To prepare for disaster recovery, be sure you understand what your coverage is for equipment, inventory and other assets you might lose. Do you have replacement price coverage or a lesser amount? What is your coverage in case of a disaster such as a flood or fire? What is the coverage for any rented or leased equipment you have on premises? Record the make, model and serial numbers of essential equipment in case anything needs to be replaced.

Thinking about communication
All of us are conditioned to have easy access to contact lists. When disaster strikes, a lack of this information can greatly delay the recovery process. Create copies of your key contact information for employees and family members, insurance provider and other vendors, and your customers. Store this information off-site, ideally in multiple versions, electronic and hard copy, to be sure you can easily access it when you need it.


The effort you put into preparing for a disaster can more than pay off in the event that disaster strikes. Take a few steps now to protect the people and information that make your business run.


Print this article