Planning for disasters in advance and keeping those plans updated may help ensure the survival of your business.
Getting back to business after a disaster depends on preparedness planning done today. Small business owners invest a tremendous amount of time, money and resources to make their ventures successful, and yet, while the importance of emergency planning may seem self-evident, it may get put on the back-burner in the face of more immediate concerns. For small business owners, being prepared can mean staying in business following a disaster. An estimated 25 percent of businesses do not reopen following a major disaster, according to the Institute for Business and Home Safety.
The materials and resources on this Web site can help small businesses make plans to recover from financial losses and business interruption and to protect their employees, the community and the environment.
SBA/Nationwide Disaster Preparedness Guide
Read and Be Ready
As a small business owner you should develop a disaster preparedness plan. It's just as important as developing a business plan. Having a disaster plan in place will make the difference between being shut down for a few days, and losing your livelihood.
Meet with an insurance agent who understands the needs of your business. Business-interruption insurance—which replaces income lost when a business suffers downtime becomes of a covered peril—should be a consideration. Normal hazard insurance doesn't cover floods, so make sure you have the right kind of insurance. Make sure you know what your insurance does not cover.
As the business owner, you should ask yourself the following questions: Am I prepared to relocate temporarily? What would happen if my suppliers shut down? Do my employees know what to do in case of an emergency?
Employees should know where all the emergency exits are located. A safety coordinator could be appointed—someone who will take responsibility for making sure all the fire extinguishers work, planning safety drills, developing evacuation plans.
Vital business records—information stored on paper and computer, should be copied and saved on both the hard dive and on backup diskettes at an offsite location at least 50 miles away from the main business site.
Your business should also have a “recovery communications” plan in place. Key employees can be assigned as spokespersons who will contact suppliers, creditors, other employees, customers, media and utility companies to get the word out that the business is still viable. Also, that spokesperson can keep the public informed of rebuilding efforts, if necessary.
Who Can Help You Prepare
Common sense measures businesses can take to prepare their business for national emergency or disaster.
Emergency Management Guide for Business and Industry.
Step-by-step advice on how to create and maintain a comprehensive emergency management plan.
A hurricane blasts through South Florida causing more than $25 billion in damages. A fire at a food processing plant results in 25 deaths, a company out of business and a small town devastated. A blizzard shuts down much of the East Coast for days. More than 150 lives are lost and millions of dollars in damages incurred.
Every year emergencies take their toll on business and industry -- in lives and dollars. But something can be done. Business and industry can limit injuries and damages and return more quickly to normal operations if they plan ahead.
This guide provides step-by-step advice on how to create and maintain a comprehensive emergency management program. It can be used by manufacturers, corporate offices, retailers, utilities or any organization where a sizable number of people work or gather.
Whether you operate from a high-rise building or an industrial complex; whether you own, rent or lease your property; whether you are a large or small company; the concepts in this guide will apply.
To begin, you need not have in-depth knowledge of emergency management. What you need is the authority to create a plan and a commitment from the chief executive officer to make emergency management part of your corporate culture.
If you already have a plan, use this guide as a resource to assess and update your plan. The guide is organized as follows:
An emergency is any unplanned event that can cause deaths or significant injuries to employees, customers or the public; or that can shut down your business, disrupt operations, cause physical or environmental damage, or threaten the facility's financial standing or public image. Obviously, numerous events can be "emergencies," including:
The term "disaster" has been left out of this document because it lends itself to a preconceived notion of a large-scale event, usually a "natural disaster." In fact, each event must be addressed within the context of the impact it has on the company and the community. What might constitute a nuisance to a large industrial facility could be a "disaster" to a small business.
Emergency management is the process of preparing for, mitigating, responding to and recovering from an emergency.
Emergency management is a dynamic process. Planning, though critical, is not the only component. Training, conducting drills, testing equipment and coordinating activities with the community are other important functions.
To be successful, emergency management requires upper management support. The chief executive sets the tone by authorizing planning to take place and directing senior management to get involved.
When presenting the "case" for emergency management, avoid dwelling on the negative effects of an emergency (e.g., deaths, fines, criminal prosecution) and emphasize the positive aspects of preparedness. For example:
Protect Your Business from Disaster
Learn how to protect your property from natural disasters.
If you aren’t sure whether your property or business is at risk from disasters caused by natural hazards, check with your local building official, city engineer, or planning and zoning administrator. They can tell you whether you are in an area where hurricanes, floods, earthquakes, wildfires, or tornadoes are likely to occur. Also, they usually can tell you how to protect yourself, your house, business and property from the different hazards.
Select a category below to view any of the resources listed here.
Protect Your Business from All Natural Hazards
Before a disaster strikes, it is important to preserve your equipment and business records you will need to bring your business back.
Planning what to do in case of a disaster is an important part of being prepared. The Internal Revenue Service encourages taxpayers to safeguard their records. Some simple steps can help taxpayers and businesses protect financial and tax records in case of disasters.
Listed below are tips for individuals and businesses on preparing for a disaster.
Many people receive bank statements and documents by e-mail. This method is an outstanding way to secure financial records. Important tax records such as W-2s, tax returns and other paper documents can be scanned onto an electronic format.
Be sure you back up your electronic files and store them in a safe place. Making duplicates and keeping them in a separate location is a good business practice. Other options include copying files onto a CD or DVD. Also, many retail stores sell computer software packages that you can use for recordkeeping.
When choosing a place to keep your important records, convenience to your home should not be your primary concern. Remember, a disaster that strikes your home is also likely to affect other facilities nearby, making quick retrieval of your records difficult and maybe even impossible.
The IRS has disaster loss workbooks for individuals ( Publication 584, Casualty, Disaster, and Theft Loss Workbook) and businesses ( Publication 584-B, Business Casualty, Disaster, and Theft Loss Workbook) that can help you compile a room-by-room list of your belongings or business equipment. This will help you recall and prove the market value of items for insurance and casualty loss claims.
One option is to photograph or videotape the contents of your home and/or business, especially items of greater value. You should store the photos with a friend or family member who lives away from the geographic area at risk.
Employers who use payroll service providers should ask the provider if they have a fiduciary bond in place. The bond could protect the employer in the event of default by the payroll service provider.
How quickly your company can get back to business after a disaster often depends on emergency planning done today. Start planning now to improve the likelihood that your company will survive and recover. Review your emergency plans annually. Just as your business changes over time, so do your preparedness needs. When you hire new employees or when there are changes in how your company functions, you should update your plans and inform your people.
There are real benefits to being prepared for disasters. The following preparedness strategies are common to all disasters. You plan only once, and are able to apply your plan to all types of hazards.
Emergency plans should be reviewed annually. Personal and business situations change over time and so do preparedness needs. Individual taxpayers should make sure they are saving documents everybody should keep including such things as W-2s, home closing statements and insurance records. When employers hire new employees or when a company or organization changes functions, plans should be updated accordingly and employees should be informed of the changes.
Make sure you have a means of receiving severe weather information; if you have a NOAA Weather Radio, put fresh batteries in it. Make sure you know what you should do if threatening weather approaches.
In the event of a disaster, the IRS stands ready to help. The IRS has valuable information you can request if your records are destroyed.
Immediately after a casualty, you can request a copy of a return and all attachments (including Form W-2) by using Form 4506, Request for Copy of Tax Return (PDF).
If you just need information from your return, you can order a transcript by calling (800) 829-1040 or using Form 4506-T, Request for Transcript of Tax Return (PDF). There is no fee for a transcript. Transcripts are available for the current year and returns processed in the three prior years. IRS.gov is an indispensable resource as you prepare for and recover from disaster.
Standard Checklist Criteria for Business Recovery
Checklist of creating a business recovery manual for medium to large businesses.
The intent of this "Checklist" is to provide a means of creating a "Business Recovery" manual for your business. The manual would be used by you in the event that you had to execute a recovery of you business due to a natural or man-made disaster. This "Checklist" can be used by manufactures, corporate offices, retailers, utilities or any organization where a sizeable number of people work or gather.
Whether you operate from a high-rise building or an industrial complex; whether you own, rent or lease your property; whether you are a large or small company; the contents of this checklist will apply.
To begin, you needn't have in-depth knowledge of emergency management. What you need is the authority to create a plan and a commitment from the chief executive officer or principal(s) of your company to make emergency management part of you company culture.
If you already have a plan, use this "Checklist" as a resource to apply business controls to the plan, if needed, or to assess the overall readiness and maintenance of your plan documentation.
The "Checklist" is divided into (4) four sections:
The Environmental Protection Agency's (EPA) Summary of Regulations Related to Industrial Shutdown Operations reminds facility owners/operators that various laws and regulations require that they minimize chemical releases during process shutdown operations; and if reportable releases occur, they must be reported immediately upon constructive knowledge of occurrence.