Disasters come in many forms. Too often, small businesses are caught off-guard by natural disasters and other crises. Disaster planning is a critical and frequently forgotten step for any business owner. Make sure your small business is prepared for what can’t be predicted,
1. Create a disaster planning “emergency file.”
In this file, include an overview of operations (who does what, etc…), important contact information, and security passwords. Keep the file in a safe place off-site.
2. Save up an emergency cash fund.
Ideally, you’ll save up enough to cover a few months of payroll and fees. Start-ups tend to have a particularly hard time with this one; for them, I recommend that they do the best they can. However, even well-established businesses may not be prepared to have cash in the event of an emergency. Usually, this is just a matter of forgetfulness; however, it can be difficult to make arrangements to get the cash if there is a natural disaster. It is better to have the cash in a separate account for that purpose.
3. Know your insurance policy.
Read the fine print, and make sure you understand what is and is not covered. Every year, reevaluate your policy and make sure you have the coverage you want. If you’re a start-up, or you’re just undergoing significant changes in a short period of time, consider reevaluating your policy more frequently (up to every 6 months). If you have made significant changes or added assets to your business, make sure you are covered.
The Wall Street Journal has a great guide to disaster planning for small businesses.