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

Betsy Markey
Betsy Markey

One of this region’s most expensive disasters unfolded the night of Sept. 9, 2013, when more than 10 inches of rain fell in a 24-hour period and flooding inundated Boulder and other communities, damaging nearly 20,000 homes and hundreds of small businesses.

Unfortunately, our region is prone to a variety of natural disasters — flooding, widlfires and tornadoes.

Statistics show 25 percent of businesses that close because of disaster never reopen. Few small businesses have the resources to assess their risks and develop recovery plans. As part of our mission to help small businesses to start, grow and succeed, the U.S. Small Business Administration can help when it comes to disaster preparedness and recovery.

Start with these six simple tips:

Evaluate your exposure. Know your region and the types of disasters most likely to affect your business. Consider your facility’s proximity to flood plains, wildfire areas and other hazards.

Review your insurance coverage. Now’s the time to consult your insurance agent to determine if your coverage is sufficient. Make sure you understand what’s covered and determine if you need flood insurance. Many general policies don’t cover flood damage. Check into business interruption insurance, which helps you cover operating expenses if you’re forced to temporarily close. Calculate the cost of business interruptions for a day, week, month or more. To the extent possible, set aside a cash reserve that will allow your company to function during the recovery phase.

Review and prepare your supply chain. Develop professional relationships with alternate vendors in case your primary supplier isn’t available. Place occasional orders with them so they’ll consider you an active customer. Create a contact list for important business contractors and vendors you plan to use in an emergency.  Keep this list with other documents in an easily accessible place as well as a protected, off-site location.

Create a crisis communications plan. Make sure your staff as well as your customers, contractors and vendors — everyone you do business with — know what’s going on in the aftermath of a disaster. Establish an e-mail alert system, keeping primary and secondary e-mail addresses for employees, customers and vendors. Provide real-time updates so they’ll know you’re still in business and in the process of rebuilding after the disaster. Don’t forget to test your plan beforehand.

Who will run your business after disaster strikes?  Let your employees know the emergency chain of command. Maintain clear leave- and sick-day policies during disasters. Have a backup payroll service should your office be destroyed.

Create and implement a business continuity plan to keep your business operating as it responds and recovers. This plan should indicate when it will be activated, identify essential business functions and staff to carry out these functions, determine which employees will be considered essential versus nonessential and identify records and documents that must remain safe and readily accessible.

Developing a disaster recovery plan is critical for all small business owners. For more information about disaster planning, log on to