From severe storms and forest fires to infrastructure issues and cyber-attacks, businesses of all sizes and types are subject to disasters and disruptions. And, while large businesses typically plan for such events, small businesses usually do not have a formal disaster-recovery plan, causing between 40 to 60 percent of them to close their doors after disaster strikes.

"Without a plan, even those who do reopen typically take much longer to recover at a much greater cost than those who are prepared," says Stan Brubaker, risk consultant with Liberty Mutual Insurance.

However, there are many things that small businesses can do to make sure that when disaster strikes, they have a roadmap to help guide their business and increase the likelihood that their business will return to top form.

To craft a comprehensive disaster-recovery plan, include these eight steps.

1. Assess your risk.

While it's impossible to prepare against every risk, you can identify those most likely to affect your business based on industry, technology, geography, and other factors. Design your plan to include actions for the most likely disruptions.

2. Identify egress and evacuation routes.

Determining how employees and customers can evacuate safely or shelter in place during a workplace emergency is a critical first part to your plan. Have clear, marked evacuation routes, and institute periodic drills so that everyone knows how to safely exit the premises.

3. Appoint an employee recovery team.

Establish a team of employees with essential skills and knowledge, such as information technology, operations, and human resources, who can help employees get back up and running remotely or from an alternate location. Provide them with contact information for key personnel as well as any outside help they will need.

4. Provide for business operations.

If your office or plant is unavailable, you need to have an alternate location for employees to work or a way for them to work remotely and access your company network. Establish how the work will get done so you can fulfill customers' expectations, Brubaker says.

5. Communicate internally and externally.

Clear and transparent communication with employees, customers, media, and others is essential for maintaining trust and reputation, Brubaker says. Establish one point of contact for employee, customer, and supplier communication. You may also enlist the help of a crisis communications firm, when appropriate, he says. ​

6. Manage customer and supply chain interaction.

You may have damaged inventory or customer orders that need to be filled. Your plan should include supplier contact information so you can alert them to the situation and keep them apprised. The plan may also include possible alternative companies who can help you meet immediate customer needs.

7. Establish emergency accounting and payroll.

Even as your business recovers, you'll need to be sure you can pay invoices and payroll. A cloud-based accounting system and third-party payroll provider can help ensure financial continuity. Adding business interruption coverage can help you cover some of the costs associated with bouncing back from an emergency.

8. Be cyber secure.

Establish steps for IT personnel to take if your company experiences a data breach or needs to keep networks secure as remote workers log in externally.

While no one likes to think about disasters, planning can make the difference between moving your business forward and shuttering it because of losses. Create a plan today to ensure that your company can bounce back after disaster.

Published on: Jul 18, 2017