Natural disasters can strike at any time. In the last year, the United States was hit with 90 natural disaster incidents that resulted in lost lives, properties, and businesses. And while it’s impossible to predict all-natural disasters and how bad it can hit your business, it is possible to prepare for the worst to soften the blow.
As a small business, you most likely don’t have the means corporations do to cut your losses in times of a crisis. So, the best thing you can do is to have contingency plans should the worst happen. Here are three ways you can protect your business from natural disasters.
Have an ERM System Set
Enterprise risk management is a strategy that assesses a business and prepares for any danger, hazard, or natural disaster that could interrupt your business’ operations. Having an enterprise risk management system in place can help companies to mitigate and manage all forms of risks while having full control and oversight when it becomes necessary to integrate these management processes.
From an operational standpoint, this is an excellent plan to have as it can help you recognize all the possible contingencies (including natural disasters) and help soften the blow on what these events can do. So, while you can’t stop a catastrophe like a natural disaster, you have plans ready so that operations can continue in a way that your business doesn’t suffer the full effect of the disaster.
Invest in Insurance
From a financial perspective, your business may suffer from a natural disaster financially because of two reasons. One is that customers may not want to do business during a natural disaster. Another is that your business’ location, equipment, and supplies might have been destroyed, making you unable to operate.
According to the Federal Emergency Management Agency, 40 percent of small businesses close down during the aftermath of a natural disaster. That is where insurance for businesses can come in. There are plenty of insurance plans suited to small firms that suffer after a natural disaster (e.g., Property Insurance, Liability Insurance, etc.). Insurance may be an added expense on your operations. Still, by investing in insurance, you get additional cash to help you recover your losses and try to salvage what you can to help your business resume operations faster.
Communicate with Stakeholders
These include your employees, clients, customers, and everyone else that has a stake at your business’ operations. Rather than focusing on your business alone, your emergency plan should also include reaching out to everyone and communicating with them about the business’s processes.
Naturally, different types of stakeholders need a separate message. Your customers will want to know when your operations will resume or whether or not their outstanding orders can still pull through. In contrast, your employees will want to understand how the disaster and operations disruption will affect their income. Having a disaster fund set aside can significantly help them at this time.
Most natural disasters can’t be predicted, but it is possible to have a plan ready before it hits. Your business’ survival needs to have operational and financial programs available, but it’s just as important as reaching out to everyone involved with your business. And having these plans ready can make it easier for your business to cope if such an event ever happens.