Mother Nature isn’t always kind to small businesses.
From flooding, to hurricanes to earthquakes, natural disasters can strike at any time. That’s why it’s important for any small business to have a plan in place to deal with the unpredictability of the environment.
According to the Federal Emergency Management Agency (FEMA), 40 to 60 percent of all small businesses hit by a natural disaster never re-open. Recent data from a CNBC/SurveyMonkey Small Business Survey also shows that most small business owners don’t spend much time thinking about natural disasters ever affecting them.
The American Red Cross has an emergency preparedness checklist for small businesses. It asks three main questions, including:
1. How vulnerable would the business be if a disaster or other emergency were to occur?
Know your region and the types of disaster that could impact your business. Research natural disasters that have occurred in your region in the past. Know your proximity to flood zones, nuclear power plants, dams and other hazards. And, always speak with your insurance agent to see what coverages might be available to you.
2. If your business was to shut down for more than a few days, what impacts will it have on your operations?
Think about policies that will affect your employees, such as the chain of command, leave policies and payroll procedures. Have a plan for your vendors including how they can contact you and a plan for customers so their product distribution isn’t interrupted.
3. What is your plan to protect the business and employees before and after the natural disaster?
Having a First Aid team in place, obtaining necessary safety equipment and considering your employees’ needs during the disaster are crucial. Developing a business continuity plan that helps keep your business operating as it responds to the emergency is also vital.
Make sure your employee, customer and supplier contact lists are up to date so you can contact everyone when you can’t reach your building. Enabling your employees to work at another location if your office is inaccessible, when possible, may be crucial to your business.
It’s also key to keep your data stored offsite or at an internet-based service (the “cloud”) so everyone can continue to communicate and work even if they can’t leave their homes. In addition, having alternate suppliers set up in case of a disaster can help with deliveries if your business relies on them.
Relying On A Lender For Help
When Hurricanes Irma and Harvey devastated Florida and Texas, respectively, many small business owners were impacted. Stearns Bank customers took advantage of the Hurricane Relief Express Loan program after those two storms in 2017. The program offered affected business customers up to $25,000 for a 12-month loan term at zero percent interest.
Contacting your lender after a natural disaster is one of the first ways a small business needs to react after suffering at the hands of Mother Nature.
If you have a loan with a financial institution, contact them immediately to let them know how much damage your business has suffered and discuss potential remedies if the disaster affects your ability to meet payments.
Be Aware Of Scam Artists
It’s also very important to be aware of scam artists looking to capitalize on someone’s misfortune. Scammers are always looking for ways to separate people in need from their money.
Make sure a prospective lender is a legitimate funding source. Never pay upfront or pay in advance and consider how you’re paying, whether with a credit card or cash. Don’t give out confidential credit information to someone who called you on the phone, for instance.
Signing up for fraud alerts with the Federal Trade Commission can give you a heads up on scams and give you a better sense of security.
Starting over after a natural disaster is something that you can prepare for. There are no ways to avoid them, but if something unthinkable happens, planning for a natural disaster could mean the difference between a small business’s survival and a “closed” sign on the front door.