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With hurricane season in full swing, many businesses are well prepared to literally weather the storm. However, disaster can strike anywhere and at any time – which means every small business owner should have a plan for dealing with major catastrophes. While it might seem impossible to be ready for the unexpected, putting the following safeguards in place will help protect your employees and reduce the likelihood of business disruption and loss of revenue.

Create a Business Preparedness Plan

One of the most important responsibilities of any small business owner is developing an emergency preparedness plan. Regardless of the location or type of business, every company needs to consider how to keep their employees safe and continue operations in the event of a natural or man-made disaster.

This plan may be simple or complex, depending on the size and scope of your business. Either way, you and your team must work together to identify all of the important issues and considerations. Begin by making a list of the types of crises that could occur, given your location and industry. Include the obvious (a blizzard in the northern states) as well as less likely scenarios (a terrorist attack.)

Creating a business continuity plan is an essential step. Determine what kind of losses would be most damaging to your operations and how long it would take to get your business back online. You can then develop an emergency recovery plan that details the resources you’ll need and the order in which your business functions should be restored. The Federal Emergency Management Agency’s (FEMA) Ready Business resource provides helpful tools to create a business preparedness plan that addresses a range of hazards.

Be sure to consider alternate locations where your business can operate temporarily in the event your facilities are damaged. This may be a local business willing to rent short-term office or warehouse space, colleagues or friends with spare offices or storage facilities, or neighborhood co-working spaces.

Put Emergency Procedures in Place

Make sure your plan includes details of the emergency procedures that need to be taken and by whom. Consider crucial actions such as shutting down machinery or power sources, obtaining flashlights, food and water, and first-aid supplies, and methods for communicating while an emergency is in progress. Identify escape routes and make sure everyone knows where they are. Designate a check-in point or meeting place that all employees should go to if there is an event that only affects your facility and a process for determining if anyone is unaccounted for.

Depending on the nature of the emergency, you may have to decide whether to shelter in place or evacuate. Your emergency plan should account for both possibilities. Perhaps most important of all, be sure each of your employees knows exactly what to do if a disaster occurs and review procedures at least annually.

Communication is Critical

Determining how to communicate effectively is one of the most important elements of any emergency plan. This includes how staff will stay in touch with each other as well as with the outside world.

  • Establish an emergency contact list. In addition to employee contact information, the list should include state, local, and federal emergency phone numbers as well as clients, suppliers, contractors, financial institutions, insurance agents, and any other individuals or businesses you might need to notify. This list should be updated consistently.
  • Keep all laptop, notebook, and cell phone batteries charged. These connections can help you stay in touch during many types of emergency situations. Text messages can often get around network disruptions, and cell phone service may be restored before electricity. It’s also a good idea to have mobile charging devices on hand.
  • Use group emails or post messages to your company’s social media page as long as electricity and Internet connections are unaffected.
  • Stay connected to sources for official emergency updates such as TV and radio. Consider investing in hand-cranked or solar powered radios so you can tune in to emergency broadcasts in the event power is lost. Many communities have alert systems you can subscribe to that send instant texts or e-mails about bad weather, road closings, local emergencies, etc.

Review Your Insurance Coverage

Having the right type and amount of insurance to protect your business and employees will help you recover faster from a catastrophe. Review your policy or policies with your agent or broker to make sure you understand exactly what losses are covered and what risks are excluded.

Keep in mind that in addition to damage to buildings or equipment, you will need to pay rent, loans, equipment leases, and other expenses whether or not your business is operating. Business interruption insurance can compensate you for lost revenue and cover operating expenses if you have to close your doors temporarily due to damage that is covered under your property insurance policy. If you are located in a flood zone, check with FEMA to find out if you need to have a separate flood insurance policy.

Safeguard Your Inventory and Equipment

Lost or damaged inventory can be extremely costly. Storing inventory above flood level and securing it against extreme weather conditions should be an ongoing operational consideration.

Your business equipment also needs to be protected against natural disasters. Secure equipment that might fall or collapse, and keep it stored away from areas of your business that pose risk to your employees’ safety. Computer equipment should be placed on desks instead of below them to reduce potential damage due to a flood or even a burst water pipe. Remember to keep an updated inventory of equipment, including make, model, and serial numbers, in a secure location or offsite for insurance purposes.

Secure Access to Working Capital

Creating an emergency fund is the best insurance your small business has for recovering from an unplanned, costly event. However, there may times when the financial challenge exceeds available funds. The U.S. Small Business Administration (SBA) provides low-interest disaster loans to businesses of all sizes. SBA disaster loans can be used to repair or replace items damaged or destroyed in a declared disaster, including real estate, machinery and equipment, and inventory and business assets.

You can also consider applying for working capital financing. Summit Financial Resources specializes in financing for small businesses, with lending programs designed to give you flexibility and fast access to cash so you can cover operating expenses and pay your employees and suppliers during any emergency.

When it comes to running your business, there is no such thing as being over-prepared. While it is impossible to anticipate every conceivable crisis, advance planning will make it easier for you and your team to successfully navigate any crisis, large or small.

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Summit Financial Resources specializes in working capital financing for small to medium-sized businesses that need increased cash flow. We provide working capital financing through invoice factoring, asset-based lending, inventory lending, and equipment financing.