What's better: preparing for a disaster that never comes or blowing off the chances of an emergency and losing your business when one occurs? According to the American Red Cross, as many as 40 percent of small businesses fail to reopen after natural catastrophes such as earthquakes and floods. Don't let this happen to your business. By taking action ahead of time, you can ensure that:

1. You minimize damage to your business, employees, customers, and suppliers.
2. Your business recovers from setbacks and reopens without unusual delays.
3. Employees stay safe and will be ready to work as soon as you reopen.

Action Steps
The best contacts and resources to help you get it done

Batten down your business

Depending on the natural catastrophes you face, you can take specific steps to make your business safer for those conditions.

I recommend: FEMA's Emergency Management Guide has a list of preventative steps to take for hurricanes, flash floods, winter storms, and more; click on each type of hazard for details.

Give employees direction

If you want employees to help out in emergencies, then they need to know ahead of time what they can do to help, even if 'helping' simply means staying out of the way and letting you know that they're safe.

I recommend: The U.S. Department of Homeland Security tells you what steps you can take to make sure employees know what to do in the event of an emergency.

Practice evacuation plans

When disaster strikes, you don't want customers and employees running around in circles because they're not sure what to do.

I recommend: Work out an evacuation plan and practice it with your workers on a regular basis. If the layout of your shop changes, revise the plan so employees always know where to go.

Store data off-site

If only one copy of something exists, you risk having that item destroyed with no chance of recovery. Having this happen to your employee data or tax records can cause major headaches down the road.

I recommend: Back up all your electronic data, either off-site on a different computer or on an online storage site such as IBackup, iStorage, Streamload, or Xdrive. You can also save copies of important paper documents in safe deposit boxes, fireproof vaults, or an offsite storage specialist such as Business Record Management or DocuSafe.

Prepare for interruptions

When your business is closed by a disaster, cash flow stops. Business interruption insurance covers profits that you would have earned, based on your financial records, had the disaster not occurred; it will also pay for ongoing operating expenses.

I recommend: If disasters would put you out of commission for months or force you to move to another location, then you want to consider adding business interruption insurance to your property insurance or business owner's policy. Allstate, The Hartford, St. Paul Travelers, and Nationwide are all examples of business insurers who offer interruption coverage.

Name a successor

You hardly want to think about being in a condition that makes you unable to run your business, but you should have a plan for how the business can function without you in case you're ill or incapacitated.

I recommend: Whether you rely on a spouse, best friend, or a stellar employee, create a continuity of operation plan and find someone willing to be your second.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  If you have a voice mail system, reserve one number for messages to employees and ask them to call for messages whenever unusual circumstances arise.
• •  Keep obstacles off the floor so that employees always have clear walkways from their workspaces to exits.
• •  Review your insurance coverage, looking into situations such as flood coverage and reimbursement for physical losses.
• •  Install fire alarms and fire extinguishers; make sure employees know where they're located and how to use them.
• •  Consider where you could continue business operations should your current location become unusable. Make contingency plans now so your business keeps rolling after a disaster.