How to prepare for and recover from a disaster

Earthquakes, tornadoes, hurricanes, snowstorms, wildfires, floods can all affect small businesses – however unlikely it may seem. By identifying the risks and creating contingency plans, you can eliminate or mitigate your losses and strengthen your business’s chances of survival.

Identify and assess the risks

Disaster planning involves:

  • Identifying risks.
  • Assessing them.
  • Putting plans in place to either avoid the risks or limit the damage (both physical and fiscal) to you and your business.

Consider the risks of natural disasters like storms as well as industry-specific risks. Businesses working with wood or flammable substances, for example, will carry a higher fire risk than others.

To identify the risks:

Work out which potential risks pose the biggest threats in terms of probability and the effects they could have.

Contingency planning

Plan to eliminate or limit the impact of risks once you’ve identified them.


Identify the steps you need to take. If fire is a risk, for example, install smoke alarms and sprinklers, fire-proof your buildings and doors, and store flammables in a secure area.

If your business relies on electricity, consider installing an Uninterrupted Power Supply (UPS) or putting a back-up generator in place.

Data protection

Address the risk of losing electronic information by:

  • Ensuring you have electronic back-ups securely stored off site.
  • Keeping printouts of your customer database plus tax and accounting records.
  • Storing your data and files remotely (in the cloud) rather than on an in-house server.

You should back up your electronic data every day so you can get your business up and running in the shortest possible time after a disaster.


Before you settle on insurance, explore the relative costs involved with all the risk prevention and mitigation options available to you, and consider what losses your business can withstand.

For example, if your business is on a riverfront, you might insure your stock and premises against flood damage but carry the flood risk yourself for goods warehoused elsewhere. Always weigh up the costs against the likely frequency or occurrence of risk and the protection you will receive.

Emergency planning

The first step during a disaster is to evacuate your business’s premises.

  • Develop a written evacuation plan to ensure everyone knows what to do in an emergency. Do a trial run to make sure it works seamlessly.
  • Include an emergency contact list containing numbers for:
    • Local emergency services.
    • Police.
    • Your city council offices.
    • Utility companies.
    • Neighboring businesses.
    • Key customers or suppliers.
    • Service providers (like IT specialists, plumbers, and glaziers).

Have at least one staff member with an up-to-date first aid certificate. American Red Cross offer courses nationwide. In the event of a large natural disaster, check your State Office of Emergency Management’s website for the latest updates and advice.

Recovering from disasters

The following are key things you’ll need to determine, to move your small business into the recovery phase.

Assess the damage

If you can safely access your premises, find out what damage the building has sustained and what stock and equipment (such as computers, tools and furniture) has been damaged.

If possible, find out about the status of any buildings next to and near your business, and how surrounding roads have been affected. It’s not unusual for a business to survive a disaster but be inaccessible because of surrounding damage. This will help you establish:

  • The kind of clean-up needed.
  • Whether you’ll need repairs or to rebuild from scratch.
  • How long your business is going to be interrupted for.
  • What type of insurance claim you’ll need to make.

Assess your finances

  • How much money, if any, will you need to reopen?
  • Are you eligible for any financial assistance?
  • What will your insurance cover be?

Talk to your bank manager for advice and contact Internal Revenue to find out if your business is eligible for any tax breaks or extensions.

Assess your available markets

Significant disasters can change markets overnight. Essential services like supermarkets can be run off their feet, while demand for luxury goods and services might drop. This could impact dramatically on your business.

If business slows, you’ll need to consider your alternatives. Brainstorm new markets you can reach out to.

For example, a café could start catering to emergency service crews, engineers and demolition workers. If you don’t already sell online, now could be a good time to start.

Communicate with those connected to your business

Find out how the disaster has impacted your:

  • Suppliers.
  • Employees.
  • Customers.

Inform them of your business’s situation. Some could offer support while others might need support. Unaffected suppliers might be able to extend your credit repayment time while employees might need time off to be with their families and to sort out damage to their homes. This information will help you make strategic decisions to move your business forward.

Use your website, customer database and social media to let customers know when you’ll resume trading, and to commiserate with and extend well wishes to those affected by the disaster. It’s vital you don’t lose touch with them.

Next steps

  • Talk to your bank manager about business insurance.
  • Download guides on protecting your business from the Federal Emergency Management Agency. Have all your staff read them, and include them in your written disaster plan.

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