Unsurprisingly, natural disasters carry heavy financial burdens. Research done for the “Annual Disaster Statistical Review” in 2013 shows these occurrences cost the U.S. an annual average of around $156.7 billion from 2003 to 2012.
However, while people tend to think the federal government and large insurance companies sustain the bulk of those losses, part of the cost stems from lost economic activity. Small businesses — which employ 49 percent our nation’s workforce — are particularly susceptible to disasters. In fact, data from the National Federation of Independent Businesses shows just 30 percent of small businesses fail to reopen after a presidentially-declared weather emergency. To look at it from the other side, that means a whopping 70 percent of small businesses never emerge successfully after such a disaster.
When preparing for the impact of a natural disaster, business owners tend to adopt a degree of tunnel vision. Often, planning only occurs once the threat — like being in the path of a hurricane or a wildfire — is very real. Moreover, it’s typically centered around how to minimize damage when there’s little time to do anything else.
For many small business owners, preparation is key. The fragility of their supply chains, for instance, means getting out ahead of (or being caught off guard by) a disruption can sometimes have the most lasting effect — good or bad — on the company.
Cancelled or delayed deliveries from suppliers can bring manufacturing operation to a screeching halt, so it’s important to have backup suppliers who can step in and, if necessary, discuss alternative options with clients.
During the incident, monitor the weather with the aid of the latest weather technology that can provide frequent updates with a high degree of accuracy. Benefits include updates for employees to maximize their safety, as well as assistance devising preparedness and recovery strategies to cope with various scenarios.
After hazardous weather passes, your company can get back on track sooner if certain things are planned ahead of time. Accomplish that — and more — through these four steps:
Investing in a professional weather service is invaluable for determining the risks you face with both short- and long-term weather forecasts. Weather risks can be geographic and seasonal, and often swing with relevant global weather patterns like El Nino or the monsoon season.
High-quality weather technology can also prove critical to coordinating the most effective disaster plan. Use it to ensure your facilities address potential safety issues and to educate your security personnel on how to best protect assets and other functions. An upgrade in weather tech helps determine which operational functions are most critical to the success of the business and your supply chain.
Creating a thorough disaster plan involves accounting for all the questions and unknowns that may arise in any type of disaster, weather or otherwise. Use third-party consultants and other experts, as their expertise can be invaluable in these unique scenarios.
Put a robust communications network in place that allows employees, management, vendors, and clients to communicate directly. The availability of quick, efficient communication — even after a disaster — is vital, especially when normal channels are disrupted or unavailable.
Going overboard with preparation is a good way to make sure no stone is left unturned. Identifying every potential hole in your supply chain is a good way to make sure yours doesn’t experience any mishaps.
Practicing your plan is just as essential as having one. Be sure communications are operational and that each member of your team is familiar with his or her role or response in case of disaster. Make sure your No. 2 and your No. 3 people are equally prepared.
As an example, label every third Wednesday of the month “Tornado Wednesday,” and evaluate your potential responses to such an event. Drills will almost always reveal weaknesses. Sometimes, they even uncover unnecessary redundancies that reduce efficiency. Consider an annual, large-scale hurricane drill if you have an exposure to the coast.
Considering alternate work locations is certainly unpleasant. But if a weather disaster destroys or disables your facility, you’ll be glad you thought about it ahead of time.
Assign employees a new place to work. After that, address vendor and client concerns by informing them of your temporary relocation. Furthermore, management should properly plan and encourage employees to be prepared at home prior to severe weather. Businesses run on people, so make sure all of yours are somewhere safe.
Weather events can vary from seasonal threats such as blizzards and hurricanes to unforeseen flooding and power outages. To further complicate matters, some years can be higher risk than others — the prolonged drought of the West Coast and Southwest exacerbates wildfires, for instance. No matter where your business is located, it’s likely to face some variety of threat at least occasionally.
Planning for the event itself (and for disruptions before and after it occurs) ensures safety of employees. It helps minimize downtime from production and supply chain interruptions, making it easier to resume operations once the threat passes.