Weathering the storm: A small business guide to disaster preparedness

National Preparedness Month is upon us, and we’re encouraging business owners to learn how to prepare for disasters and emergencies. Natural disasters put your business at risk, and many small businesses struggle to reopen afterward. It is essential to be prepared not only to keep yourself and your employees safe, but also to protect your long-term bottom line. To support your efforts, we’ve compiled key steps you can take this month to stay informed and keep your business safe should a disaster strike.

Assess your risk

Every business is vulnerable to natural disasters, whether from a hurricane, an earthquake or a wildfire. By knowing what could happen in your area, you can plan and stay prepared. Assessing your risk means taking stock of potential hazards at your business's location. Start by analyzing your business’s structural vulnerabilities, then determine how severely a disaster could impact your operations and finances. Use a risk assessment worksheet to note vulnerabilities and rank the likelihood of different disasters in your area. Moreover, using a disaster-specific toolkit can provide more insight into the specific risks to watch for.

Create a plan

As a small business owner, you're no stranger to the importance of creating a plan. When facing a disaster, having one in place can make a significant difference in protecting your business and keeping your employees safe. A clear emergency response plan provides actionable steps to follow during an emergency and can help mitigate potential financial losses and damage to assets. 

Cyber resilience 

While your paperwork is safer when digitized, if it isn’t properly backed up, a disaster can wipe out your data just as easily as it can your storefront. Make sure you are regularly backing up your customer records, financial statements and vendor contracts, preferably to the cloud in the event that your computers are inaccessible or destroyed. Additionally, use these key tips from the IRS to document your assets and digitize your financial records.

Insurance review

Most standard business policies don’t cover flood damage, and some don’t cover natural disasters at all. You don’t want to learn this the week a disaster strikes. Make sure you review your coverage limits each year, and connect with your provider about separate insurance plans you may need for flooding or business interruption. You can check out the National Association of Insurance Commissioners’ overview of business interruption coverage to learn more. 

Prepare your employees 

Once you have a plan in place, it’s time to share it with your employees. Communicating your plan ensures your team is on the same page and fully informed about the steps needed to keep themselves and their coworkers safe during a disaster. It also helps employees on your emergency response team understand their roles and responsibilities. Likewise, ensuring your employees have any necessary safety trainings, such as fire safety protocols, CPR certification, alert systems training and more, can reduce risks and improve response effectiveness.

If disaster strikes

Document everything 

We hope you never have to act on all your preparation, but in the event that your business is impacted by a natural disaster, make sure you document the damage before you start on any repairs or cleanup. Take photos and videos of every damaged area, and keep the receipts for anything you replace. Insurance adjusters and SBA loan officers both rely on this documentation, and having it available can speed up the process. 

Funding and lending

The Small Business Administration offers small business funding, such as home and property disaster loans, economic injury loans and other financial resources to help get your business up and running again. Additionally, you should check your local government websites and our grant portal for local small business recovery grant funding. 

Tax relief

If your business is in a federally declared disaster area, the IRS will often automatically postpone filing and payment deadlines. Check the IRS disaster assistance page for businesses to see if relief applies to you. 

You can’t prevent a natural disaster, but taking these steps now can help your business withstand one and get back up and running faster. Stay safe and be prepared!