By Steve Irion, Wells Fargo’s Market President
Disasters come in all shapes and sizes. Some are nature’s fury, and others the result of man-made errors. While you can’t prevent all disasters from occurring, there are measures you can take to protect your company’s bottom line when a disaster strikes.
In a recent Wells Fargo/Gallup Small Business Index survey, less than a third (31 percent) of business owners said their businesses are extremely or very prepared for such disasters, with another 46 percent indicating they are only somewhat prepared. More than half (54 percent) indicated they are not concerned about a disaster impacting their business. Not good! Businesses that are forced to close down following a disaster run the risk of never being able to open their doors again. The best time to prepare for a disaster is well before it happens. September is National Preparedness Month so there’s no better time than now to start developing your company’s disaster recovery plan.
Create a business inventory — Take photos of your company’s computers, mobile devices and other equipment. Record the items’ descriptions and serial numbers and store this information (along with their respective receipts) in a safe, off-site location.
Develop a communications strategy — You’ll want to make sure you can contact key people after a disaster. Your list should include employee contact information, local and state emergency management agencies, major clients, contractors, suppliers, realtors, financial institutions and insurance agents.
Back up data — It’s a smart business practice to regularly back up your computer data files and store them off premises, but in the case of a disaster, this backup will prove invaluable. Also be sure to keep copies of important paper records and documents in a safe deposit box, and make sure they’re up to date.
Create a contingency plan — Be sure your plan outlines the following:
• What the evacuation strategy will be if an emergency occurs onsite
• Who will notify all employees
• Where employees will meet if your business’s building is physically inaccessible
• How employees should respond if approached by the media
• How employees can return to work and how customers can return to your shop
• How you will access a backup source of power or communications systems
• What the financial impact would be if your business shuts down
Review your business insurance coverage — Some costs due to a natural disaster (e.g., destruction of your inventory) may be covered by a standard business owners policy. But flood damage or income interruptions due to damage that occurs off your premises, such as to a key customer or supplier, may not be covered by your current policy. Consult with your business insurance agent annually to make sure there are no gaps in your coverage.
Getting back to business as quickly as possible after a disaster pays dividends beyond your company’s bottom line. When companies get back on track, they provide essential jobs, products and services that can benefit the entire community. Review your current disaster recovery plan and talk with your banker and business insurance agent today to help protect what you’ve built so you can continue serving customers for years to come.