Master disaster: five steps to prepare for the worst-case scenario

Many small businesses face a struggle to rebuild after recent flooding in Colorado. In terms of economic losses, the September storms will be remembered as one of the largest natural disasters in Colorado history.

Many businesses, particularly those in the hardest-hit areas of the Front Range and Eastern Plains, were caught off guard by the catastrophic storms. In addition to the physical destruction caused by flooding, power outages, road closures and sewage problems, small businesses face huge financial loses.

The lesson for all small businesses is that it’s important to develop a disaster preparedness plan. With a solid plan in place, your business stands a better chance of recovering more quickly after a disaster.

The U.S. Small Small Business Administration and Agility Recovery Solutions recently hosted a series of webinars designed to help business owners develop disaster plans. Visit the website at to access past webinars and other resources.

Meanwhile, here are a few things you can do to jump-start your business continuity plan:

Determine your greatest risk potential: Your business could suffer financial losses due to road and bridge closings in the aftermath of a major storm. Power outages also pose a major threat, especially to businesses in the food and hospitality industries. What would happen if you had to shut down your business for several days?  Look at the building where you do business — inside and out — and assess the risks. If you do this early enough, you’ll have time to complete such structural upgrades as impact-resistant doors and windows that could prevent possible storm damage.

Assess your supply chain vulnerability. Consider the services or products vendors support. Where are your vendors located? What’s their average delivery time? How often do you use a given company, and are they your sole source for a service or product? Use a variety of suppliers. Make a list of companies outside your area, or even internationally, that can supply the key items you need to stay in business after an emergency. Develop relationships with alternative vendors in case your primary supplier faces its own business interruption. If this isn’t an option, now’s a good time to start stockpiling important supplies.

Review your insurance coverage. Contact your insurance agent to find out if your policy is adequate for your needs and determine the right coverage for your situation. When buying insurance, ask “How much can I afford to lose?” It’s a good idea to know the value of your property. Consider business interruption insurance, which compensates you for lost income if your company has to shut down after a disaster. Being forced to close your doors after a power outage or being cut off from your clients because the roads are washed out constitute major causes of economic injury to small businesses after disasters.

Back up your data. Often a break in the supply chain is caused internally when businesses don’t have access to important trade-related documents necessary to reorder supplies or replace inventory and equipment damaged during disasters. Make copies of your data and important property records and store everything off-site at a secure location. Regularly verify you’re able to easily retrieve your data.

Plan for an alternate location. Look for several alternative places to relocate your company in the event a disaster forces you to shut down indefinitely. If possible, make plans for employees to telecommute until the operation has been rebuilt.

Whether or not your business survives after a disaster depends in large part to the time you invest beforehand in preparing for a worst-case scenario.


Carol Chastang works as a public affairs specialist with the U.S. Small Business Administration. For more information about available resources from the SBA, including disaster preparedness and relief, visit the website at