No one likes to think about what could go wrong, but you can’t ignore the risk when you run your own business. Chances are, every business, at one point or another, will face unexpected challenges, difficulties or even disasters. What matters is that you’re ready to deal with them.
How can businesses prepare for unforeseen challenges? It’s impossible to think of and deal with every potential business threat. Still, you can take steps to protect yourself and your business from the financial, natural or human difficulties that could arise.
Unforeseen disasters are, by definition, unexpected. However, the more you consider every possibility in advance, the less likely you are to be taken by surprise. Take the time to think about what could go wrong, and prepare a risk-management plan that outlines how you’ll deal with each possibility.
The more prepared you are, the better you’ll be able to respond and keep your business safe and secure. Here are some of the scenarios to think about:
When disaster strikes, communication is key. Customer communication and internal communication are crucial, and so is communicating with vendors, your insurance company, relevant government entities and nonprofit organizations.
It’s impossible to prepare for everything, but here are 11 proactive steps to protect your business against the most likely scenarios.
The first step is to consider everything that could go wrong in your business, including natural disasters. Consider the following questions:
Although all your business functions are important, some are non-negotiable. Determine the vital roles or tasks that must continue to keep your business on its feet – and which can be allowed to fall by the wayside for a short period.
Ensuring workplace safety means buying and maintaining safety equipment, marking emergency escape routes, and planning your immediate response in the case of fire, flood, lockdown, power failure or other potential disaster. Rehearse your emergency response plan with your entire staff once or twice a year.
Any employee injury suffered on your premises could be filed as a workers’ compensation claim.
Since your business data and processes are likely digitized, you should never rely on just one server or copy of your most important documents and information. Back up vital data to cloud storage with fortified cloud encryption and diversify your server locations (if relevant).
You don’t want to lose all your business information if there’s a regional power outage or a flood wipes out the local servers.
To learn more about cloud storage features, benefits, and prices, check out our reviews of the best cloud storage and online backup services.
Suppose only one person knows all the passwords or how to access the emergency internet server. If they’re not present, the whole business will fall apart.
Ensure at least two people know every password. Try to have at least one other trusted person who knows how to perform the vital elements of another employee’s crucial role. If that’s impossible, at least ensure your most critical business processes are fully documented so someone else can take over in a pinch.
Good business insurance coverage isn’t just about buying enough insurance; it’s about choosing the right business insurance policies for your business needs.
Ensure your general liability insurance policy is robust, and consider specialty insurance like specific disaster coverage, cyber liability insurance, or equipment insurance. Consult an insurance provider that’s experienced in providing policies for small businesses.
To find the most comprehensive business insurance for your organization, check out our picks for the best business insurance providers.
Your emergency fund should be enough to cover your core business expenses for six months. This gives you a safety net if your cash flow encounters a snag or a hurricane hits your office.
Whether you need to get in touch with your team at midnight to tell everyone not to come to work the next day or you need to ensure everybody got home safely after a massive storm, you must be able to contact all your employees at any time.
Keep your records up to date and accessible even if the internet is down, you’re stuck on a train, or you have to evacuate the building.
Use Google Person Finder or the Red Cross Safe and Well app to check on your family and employees after a disaster.
Establish remote working capabilities and secure, reliable ways to communicate with all your employees. Setting up a remote work plan and communication channels long in advance ensures you’ll keep the business running even if all your employees are geographically scattered or can’t come into the office.
Nothing makes a difficult situation worse than a lack of leadership. Everyone should know who to contact if something goes wrong and who makes decisions in an emergency. A clear chain of command prevents a crisis from turning into a catastrophe.
Investigate the municipal, state or federal resources available for businesses after a natural or financial disaster. Resources can include the following:
The U.S. Small Business Administration (SBA) offers low-interest loans and other resources to businesses affected by a disaster. You can call the SBA at 1-800-659-2955 (TTY: 1-800-877-8339) or email disastercustomerservice@sba.gov.
When disaster hits, respond immediately with the following steps:
Evyatar Sagie contributed to the writing and reporting in this article.