How to Prepare Your Business for an Emergency

Submitted by Anya Crittenton on
Flickr: JLS Photography

Man plans, and God laughs. So the adage goes, warning us about unexpected events and occurrences we most decidedly did not plan for. Which is why having steps in place to prepare your business for an emergency is so important.

Risks run the gamut when running a business, from natural disasters to cyber-attacks and financial hardships to theft. 

This is why it’s key to have a business continuity plan (BCP), a system of preventative and recovery tactics in case of any emergency or setback. 

Below are six steps you should take for your business to make sure if you ever are faced with an emergency, your business has the means to maintain operations and withstand the hardship. 

  1. Develop the BCP 

If you don’t have a BCP at all, a good place to start is FEMA’s Ready program, created in 2003 to help individuals, communities, businesses, and other institutions prepare for emergencies. 

Ready offers a BCP Suite, software for any business to create, modify, or improve its BCP. This software comprises of a three-step training program, including learning more about what a BCP is and why it’s important, and several steps of the BCP planning process. 

There are several more resources on the Ready website for businesses, including crisis communications, employee assistance and support, risk assessment, and more. 

Several other groups have similar resources, so be sure not to miss them. The Small Businesses Administration (SBA), the IRS, and the US Chamber of Commerce are just a few beyond FEMA. 

  1. Have a Rainy Day Fund 

As with anything in life, be prepared for the worst. Or at least the unexpected. 

Emergencies can make or break a business because of how they may affect a businesses’ operations, returns, and profitability. That’s why it’s crucial to take a proactive approach in preparing for something to go awry. 

Just like an individual saves up a rainy day fund for that car repair or unexpected medical bill, a business should also have money set aside in its coffers to offset any costs incurred by an emergency. Costs can include anything from salaries and benefits, damage not covered by insurance, or simply keeping the business afloat while in recovery. 

To calculate a rainy day fund, first tally up your business’ regular expenses and then do the math to determine how much the business would need to survive three months, six months, or however long to feel secure in keeping the business open.  

  1. Be Prepared for a Natural Disaster 

If your business has any sort of physical presence, whether consumer-facing or not, it is crucial to be prepared for a natural disaster. Many of the steps to safeguard a business during a disaster are the same as they are for an individual. 

The most important thing is people’s safety, so make sure there is a clear and known emergency exit and first aid kit, along with other essentials like flashlights, water, and more. A great thing to do is offer your employees training on CPR and other medical situations. 

Take the steps now to protect your business, too. Back up all data and with anything physical, invest in a waterproof and fireproof safe or a safety deposit box. 

If a natural disaster does hit and affect your business, make sure to take advantage of various recovery resources provided by the government. The SBA, for example, offers disaster assistance loans

Prepare your business for an emergency.
Make sure you have a plan in place for all possibilities. Photo Credit: Unsplash/Alvaro Reyes.
  1. Be Prepared for an Economic Disaster  

A hurricane or tornado are not the only worries a business has. In instances like a recession, it is best to be prepared for changes instead of trying to fight them. 

Two important steps are managing your cash flow and strengthening your cash reserves (like that rainy day fund!). Start looking at your business’ cash flow now and forecasting several months out. There are plenty of resources available to start forecasting, from templates provided by websites like Workday and CashAnalytics

Always look at the data and make strategic decisions based on what the data says. If you have the means, work with a financial adviser to make sure your business is economically sound. 

It is also important to remember, unless the economic disaster is not widespread or limited to your business’ operations, other people are also facing similar hardships. It is beneficial to stay on top of collections and receivables from consumers, while maintaining empathy for what your community is going through and how your business can lend a helping hand. 

  1. Consider Insurance and Liability 

It’s everyone’s favorite topic: insurance. And just like in your own personal life, there are also several types of insurance a business should have. Below are various types you should investigate for your business if you haven’t already: 

  • Liability: Insurance that covers liability protects businesses from claims of bodily injury or property damage. Some types of liability insurance to research include general liability, small business liability, property liability, and professional liability. 
  • Business Interruption (or Business Income Coverage): This insurance replaces lost income due to covered property damage (from a fire, flood, etc.). 
  • Commercial Property Insurance: Protects owned or rented property and equipment from theft and more. 
  • Data Breach Insurance: This helps your business respond to lost or stolen personally identifiable information. 

There are so many more types of insurance out there so be sure to identify what is most important for you and your business, taking into account factors like where the business is located, how many employees there are, what the work includes (if employees have to drive vehicles, for example, make sure to get commercial auto insurance), and beyond. From there, you can do your research to figure out what types of insurance your business needs. 

  1. Develop an Emergency Chain of Command 

Emergencies are scary. They trigger our fight or flight response, and they often don’t give us time to stop and think about what to do. This is why having a BCP is important but make sure there is a personnel plan, too, in an emergency. 

An effective response to an emergency occurs when there is a clear line of communication and command among people. Long before an emergency ever happens, brief your entire team on the BCP and other relevant information. Then, establish a chain of command in the case of an emergency, such as someone tasked with calling 911, someone who knows CPR, and backups in case anyone is out or otherwise unable to perform their task. 

  1. Consult Your Chamber of Commerce or Security Experts 

Beyond this article, there is endless information available from government agencies, disaster relief organizations, and more.  

But preparing for an emergency can be taxing and overwhelming, not to mention frightening. It is always better to ask for help if you don’t know what to do or where to begin. 

In the case of emergency planning, consult your local chamber of commerce for help and resources, and explore hiring security consultants to help your business assess risks and threats, review a business’ policies, and plan. 

No one wants to think about a disaster or emergency impacting their life. In times of increasing weather-related occurrences and a fluctuating economy, however, it is imperative we do so, and that includes your small business. 

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