Last November, my small business was impacted by the Southern California Woolsey Fire.
Our office is headquartered in Calabasas, California, which was part of a major evacuation zone in the fire. The impact of the wildfires after they were put out, thankfully, was nothing catastrophic. Our building did not burn down or come close to being in harm’s way, our data remained protected, and our team of employees were safe. I am thankful that we could breathe a sigh of relief because we had long been prepared for these “what if?” moments from Mother Nature.
Fires aren’t the only thing we have long prepared for, either. Periodically throughout the year, I also run earthquake drills with our team. Like, I literally run through our open office floor plan to encourage everyone to assume the proper position — drop, cover and hold on. I know it may look silly for me to be running around like that when “the big one” isn’t actually taking place, but the reality is that there’s nothing silly about taking preemptive safety precautions.
[Related: After a Disaster, a Winery Starts Anew]
There are many details that need to be covered to help protect a small business from a natural disaster. This goes beyond signing up for an insurance plan. You must also consider how you will protect your team members while also serving customers — and you need to think about what your overall recovery timeline will look like, as natural disasters are rarely resolved in less than 24 hours. Even businesses that think they have everything under control can always use this safety checklist for disaster planning.
Set Aside a Disaster Fund
Think of this as a rainy day fund, but for the real “break in case of emergency” emergencies. Your business may temporarily be unable to generate money during a natural disaster, and this may become a serious issue if you cannot afford to pay employees on your payroll.
Cate Steane is the founder of Make It Happen Preparedness Services. Based out of Northern California, an area at high risk for earthquakes, wildfires and floods, Steane has seen all three occur to devastating effects in the last five years.
Steane strongly advises building three months’ worth of operating expenses as your small business’ cash reserve. In the event that income is interrupted, the interruption policy will likely have a waiting period. It may take time for your claim to be processed, and employees that depend on paychecks can’t afford to wait for long.
“Once you’ve built a cash reserve, you can keep your employees on payroll.” Steane says, “The last thing you can afford is to lose your trained, experienced staff.”
Meet With Your Insurance Advisor
There’s never a bad time to review your existing insurance coverage. Steane recommends meeting your advisor as a means of protecting three areas of your business’ investment.
1. Ensure that your policy limits are high enough to cover the full replacement cost of your property. This takes into account the labor rates and material costs in your area, both of which Steane notes will rise during a natural disaster.
2. Invest in coverage for natural disasters that happen in your area. For example, if flood and earthquake insurance is expensive where you live, it’s because these events are likely to occur in your location. Ergo, the amount of your loss is likely to be high. Steane urges businesses to reexamine their business models if they don’t think they can afford them. “You can’t afford ‘not’ to have this coverage.” Steane says.
3. Make sure you have good business interruption coverage. For example, if you’re like me and run a business in Southern California, an area which is prone to earthquakes, you will need to have Difference in Conditions coverage as part of that business interruption policy.
Backup Important Documents — Now
Mandy Kilinskis is the marketing coordinator for Datamation Imaging Services, a business that provides document scanning and workflow automation services. The company is based out of Willowbrook, Illinois, and Kilinskis is used to seeing tornadoes and blizzards ravage the Midwest.
While Kilinskis admits this tip may be biased due to the nature of her business, she advises all companies back up important documents and store them in an off-site location. Photocopies may be stored at your home, but Kilinskis advocates going the next step further and scanning and uploading files into a cloud system.
“You can access the information that you need from anywhere, at any time, and on any device,” Kilinskis says. “Once your documents are on the cloud, you and/or your employees can make sure that you have payroll, insurance claims, and everything else your business needs to keep going and get back on track.”
[Related: The Women Entrepreneurs Who Beat Hurricane Sandy]
Create Emergency Kits
Don’t already have emergency kits in the workplace for your employees? Prep ahead by making emergency kits that contain, at a minimum, the following items.
- Water (one gallon per person, per day, is the advised amount)
- Nonperishable snacks (granola bars, trail mix, dried fruit, peanut butter, and canned meals and vegetables like tuna and beans are all good kit investments)
- Nonelectric can opener (for the canned meals!)
- First Aid kit
- Solar cell phone chargers
- Backup systems like generators, servers, and smoke alarms. Technically, these items can’t ‘fit’ into an emergency kit, but it’s necessary to ensure your business has backup systems to safely run the business
Check in with your kits on a regular basis to ensure they are fully stocked, and make sure your employees know where to find them in the office.
Run Through Your Emergency Plan With Employees Yearly
I do this with my earthquake drills (along with other emergency plans), and it usually occurs more than once a year. When a natural disaster strikes, it’s incredibly easy to throw all of your training out the window and start panicking. If you don’t practice often enough or at all with your team, then they’ll really begin to panic. Safety first! Make a regular practice out of this, especially as you hire new employees.
Update Employee Contact Information
It’s not enough to have a phone tree in the event of an emergency. Make sure you have updated contact information on every employee and a variety of ways you can reach out to them during a natural disaster — if not a phone call, then text, FaceTime, email or social media outreach. You may encourage your employees to check in with your company Twitter or Facebook accounts for updates, and use the platforms as a means of keeping customers updated on your current situation, too.
Serve Your Customers
In the event of a severe natural disaster, or if you live in an area where disasters are routinely seasonal, discuss possible remote work options with your team. This will allow you to prepare members to work remotely in safe places and ensure that customer needs are being met accordingly.
Now that you have a solid checklist in place, you’ll be ready to better protect your people, business, and ultimately your customer base. The better prepared you are for the worst, the sooner you can get back on your feet and regain stability and confidence that the best is still yet to come.
Deborah Sweeney is the CEO of MyCorporation.com which provides online legal filing services for entrepreneurs and businesses, startup bundles that include corporation and LLC formation, registered agent services, DBAs, and trademark and copyright filing services. You can find MyCorporation on Twitter at @MyCorporation.
[Related: This Fintech Entrepreneur Is Banking on Disaster. Literally.]