All individuals and businesses should be prepared for the unexpected by setting up an emergency management plan. While an emergency fund can help individuals cover unexpected expenses such as a large medical bill, it will take more for businesses to be ready for a disaster. According to James Bucki, Director of Computing Technologies at Genesee Community College, statistics show that 75 percent of businesses that experience a significant disaster fail within six months, highlighting the need to be prepared.
“Remember that your company is a series of interconnected systems,” he writes in an April 2017 article for TheBalance.com. “If a disaster disables any one of those systems it could bring your entire company to a standstill.”
Assess the risk of disaster
The first step toward setting up an emergency management plan for your business is assessing the risks it faces. For instance, depending on where you are based, your business may face very different kinds of natural disasters, such as hurricanes, tornados, floods or avalanches. Kevin Simpson, Founder and Chief Investment Officer of Capital Wealth Planning, recommends using Ready Rating Program, a free service by the American Red Cross, to determine your risk level. “This will help you have a starting point to know how prepared you are right now and what steps to take and build your disaster preparedness plan for your business,” he writes in a November 2017 article for Investopedia.com.
Once you’ve assessed your business’ risk level, you should budget for the most likely scenarios. Planning for each and every type of disaster that could possibly affect your business is unrealistic and cost-prohibitive, so it’s important to spend your money where it is most likely to make a difference. You can also minimize risk by investing in infrastructure, such as renting an office or building strong enough to survive the impacts of a hurricane or other natural disaster.
All good emergency management plans put their primary focus on the safety of yourself and your employees. “If you are required to evacuate, everyone should be familiar with the evacuation procedures,” writes Robert Hernandez, Found of Main Street Associates, in a September 2017 article for Investopedia.com. “If evacuation is not possible, where are the secure areas on the business premises? Talk this through and make sure everyone gets it.”
It can be beneficial to appoint specific leaders to oversee the company in the event of a threat, such as a fire, hurricane or tornado. “You can’t rely on every employee to remember the emergency procedures,” says Brandon Lewis, owner of advertising firm Revenue Jump. “Leaders must be appointed and they must be trained and retrained regularly on how to implement the emergency plans [for the specific crisis] under their responsibility.”
Backup important data and documents
Being able to quickly access your business’ most important data in the event of an emergency is key to its survival. “You must have your data backups accessible in a timely manner in order to restore them to your recovery servers,” Bucki writes. “The best solution is to store your data backups in multiple offsite locations. This can quickly become a logistical and security nightmare if you have a significant volume of data.”
One way to tackle this problem is to focus on backing up only the most crucial data or to resort to secure cloud-based storage via the internet. Additionally, you should keep an emergency kit that includes copies and/or originals of your most essential papers. “Back up data files regularly and keep important records and documents in a safe deposit box, preferably not on the business premises,” Hernandez advises.
Finally, you should always be sure to have business insurance. Additional life, property or business interruption insurance can also help cover other expenses. Consult your financial institution for more help about preparing your business for emergencies.