preparing your small business for the worst
By: vnadal
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Preparing Your Small Business for the Worst

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Every entrepreneur believes that their business will be an overwhelming success, the next big thing. And, that’s good! As a small business owner, with all of the stress and hard work, you have to keep that optimism and positive attitude, as that is necessary to be successful. That positive attitude will also be an invaluable asset during times of stress or uncertainty. So, don’t lose that! However, as a small business owner, it is equally vital that you be realistic and prepare yourself for any and all eventualities. By considering the various, potential scenarios in advance, it will better position you to weather any storms that may come along.

Fires, hurricanes, frozen pipes, water main breaks. Sudden economic downturns, lack of customers, high overhead. The list of things to panic about could seem potentially endless, making it overwhelming and unmanageable. However, if you don’t have certain mechanisms in place, it will be more overwhelming to address crises in the unfortunate event that they arise. Recent studies indicate that 74% of small businesses do not have a disaster plan and 84% do not even carry insurance against natural events. Addressing issues such as these before they actually become issues, will put you well ahead of many of your competitors.

Write It Out

Take the time to write out a plan as to who will oversee what, who will need to be contacted first, etc., in the event of various circumstances. Who makes the call that the office will be closed in the event of a hurricane or blizzard? Does that person contact all employees, or do they begin a phone chain, wherein each employee is then responsible for contacting someone else? Does your business have the technology for a mass text message to be sent to all the employees in such an event?

A good place to start in creating such a plan is to conduct a thorough risk assessment to determine where your small businesses weaknesses are. Understanding where your company’s vulnerabilities are (for example, is all of your web design offsite, with no one on staff to make updates to the website or know what to do should the website crash?), will better create comprehensive plans as to how to best address crisis situations.

Location, Location, Location

If you are based in Colorado, then your small business may not have to worry about hurricanes, but there is a good chance that you may need to be concerned about blizzards and mudslides. Don’t waste your time preparing for natural disasters that are highly unlikely in your geographic area (unless you have a multi-site small business or have employees that work remotely in various parts of the country), but definitely thoroughly examine and create plans, accordingly, for those natural disasters that are distinct possibilities in your region. Based in Oklahoma or Kansas? Then you had better make sure that your small business has the appropriate tornado coverage in your insurance policy.

Once you have determined the various natural disasters for which you need to be prepared, ensuring that your small business is properly covered will be key. Work closely with your insurance agent or broker to ensure your small business has the best coverage available. Obviously, the more comprehensive the insurance, the more expensive it will be, but in the long run, it will be far less expensive than having to replace products, merchandise or equipment that ends up not being covered by your insurance policy. When Hurricane Isabelle hit Virginia and North Carolina, everyone had flood insurance, but hardly anyone had thought to have insurance covering wind damage. As it turns out, it was the winds associated with that hurricane that did the bulk of the damage. In turn, it means that many small business owners lost a great deal of revenue as they weren’t properly insured. Don’t run that risk: make sure you have the most comprehensive coverage that you can.

Being properly insured is not only needed to replace computers, floors, or roofs, but can help you better absorb any financial damage that will occur. Having comprehensive coverage can help you rest a bit easier, knowing that you will still be able to pay your lease and payroll, if operations need to temporarily shut down.

Back It Up

We are a society that is very dependent upon technology and our computers and chances are, your small business is no different. While many small businesses are reliant upon computers in the day-to-day operations, very few of them actually take the time to back up their data.

Floods damage electronics. Computers crash. Cyber crimes get committed, resulting in information being hacked and stolen. These are just a few examples as to why it is so important to ensure your small businesses data is being backed up. Perhaps you are a fairly tech savvy entrepreneur and you have your small businesses information saved to the cloud. In that case, you have little to worry about, other than perhaps replacing hardware, if need be. However, if all of your data is stored locally on hard drives, you will want to reconsider this approach. Even if you just identify your small businesses most important data and save it to the cloud or back it up on an external hard drive, you will be saving yourself a lot of headaches down the road. Trying to replace lost data is nearly impossible, and even if it’s not, it’s terribly time consuming, time that you and your staff could be using to grow your business.

Deep Impact

As you are considering the myriad of scenarios that may send your small business into crisis mode, make sure you are fully considering the full impact of such eventualities.

For example, yes the power going out means that your employees can’t work on their computers or cash registers, they cannot access online orders. But, it also means that all of the food in the freezer or refrigerator of your restaurant may not keep. Or, the cosmetics that you keep in temperature controlled storage rooms may start to melt. Many small businesses invest in generators for such an event, and if a power outage could potentially throw a wrench in both your operations and your products or services, then it’s an investment which you may want to strongly consider, as well.

Yes, a hurricane may cause your business to lose power for a few days (and, now you have the generator to address that problem), but what is the additional impact of that Category 4 hurricane that caused a tree to fall on the roof of your building? This is yet another time in which you will want to play that tape all the way through to the end. Yes, it may seem discouraging or overwhelming, but consider how overwhelming it will be if you hadn’t prepared as best you could for any and all eventualities.

Practice, Practice, Practice

Once you have considered the various things for which you may need to prepare and created the necessary plans, you will need to make sure that all of your employees are well-versed on what their specific roles are in crisis management, as well as the appropriate company response.

Designate a team to be responsible for conducting the assessment, creating the plan and communicating, both internally and externally. From there, conduct drills, practice with the staff, whether it be activating the phone or evacuating the building. Keeping your employees in the loop as to what your small businesses crisis management plans are, while also empowering them to be a part of the solution if and when such events occur, will help ensure that your plan gets put into play as smoothly and as effectively as possible. Additionally, it will result in your staff going above and beyond in helping you weather the storm.

If you are beginning to panic, thinking of all the things that may go wrong, from a network crash to a flash flood that could impact your business, just consider that the majority of things for which we prepare, never happen. However, Murphy’s Law being what it is, if you don’t properly prepare, then there’s a good chance that it will occur! So, best to err on the side of caution and make sure that you and your small business are thoroughly prepared for any and all eventualities. Any discomfort you may feel in having to imagine every worst case scenario will be worth it, when you have all the appropriate systems in place, should you need to activate them.

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