In a nutshell: Don’t let your business go out of business after a disaster.

It’s impossible to understate the dangers disasters, such as hurricanes, floods and earthquakes, pose to small businesses. The Federal Emergency Management Agency (FEMA), says that 40 to 60 percent of small businesses never reopen after a disaster. Even more alarming: The failure rate for small companies that can’t resume operations within five days of a disaster is 90 percent.

Those are not good odds. This article will look at some steps you can take that may improve your likelihood of business survival after a disaster. We’ll look at what you can do before and after disaster hits.


“Be Prepared” is the Boy Scout motto. It’s also a good way to think about handling disasters. A well-thought-out plan will outline the steps you need to take after disaster strikes, so you can spend less time worrying about what to do and more time doing it. Even the most basic plans — a checklist and a contact list — is better than no preparation at all.

We’ve written about disaster planning here at Business Administration. Check out the story here. There are many elements that go into a smart disaster recovery plan, including:

  • Contact information for all employees.
  • Contact information for people you’ll need to contact after the disaster, such as an insurance agent, your suppliers and your customers.
  • A list of tasks that need to be taken before and after a disaster, and who is responsible for doing each one.

Disaster recovery plans should be updated regularly and practiced. Other things to consider:

  • What steps do you need to take to protect your property, inventory and physical assets, such as computers and factory equipment?
  • Where is your insurance policy stored, and is it up-to-date?
  • Do you have business income or interruption insurance?
  • Where is your data backed up?


The first consideration after any disaster — before you even give a thought to your business — needs to be people. Are you and your family safe? What about your employees and their families?

You may not be able to return home or visit your business for some time. Listen carefully to law enforcement and emergency services to determine when conditions are safe. Then assess the damage.

At this point, you should already have put your disaster plan into effect, if you have one. Think of your plan as a guideline — you’ll need to adapt to whatever unplanned circumstances arise.

As soon as possible, contact your employees and your insurance company. If you aren’t able to restart operations quickly, this is the right time to contact suppliers and customers. If your office, factory or warehouse facility is damaged, flooded or without power, you might need to find a temporary facility.

During the disaster recovery period, the Small Business Administration(SBA) will be a valuable resource for information about assistance programs. Keep records of all your disaster-related expenses and activities, as they might be helpful when you file your next tax return.

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