Entrepreneurs may think crises are reserved for politicians, large corporations and Kathie Lee Gifford, but a debilitating disaster can strike even the smallest of ventures. Unlike Fortune 500 CEOs who have legal departments and PR agencies to call on, small-business owners usually have to handle emergencies themselves. But can a small business really plan for a crisis? Absolutely, says crisis management expert Jeffrey R. Caponigro.

Caponigro defines a crisis as anything that has the potential to negatively affect the reputation or credibility of your business. He suggests entrepreneurs follow some basic steps to prepare for and manage a crisis:

  • Form a crisis team. Even if it's only you and one other person, you need to define roles and know who to call if a crisis hits. Make sure you exchange home, pager and cell phone numbers so you'll know how to reach team members at odd hours.
  • Identify your vulnerabilities. Start by looking within your business. A crisis is more likely to result from internal mismanagement. Caponigro advises businesses to make two lists, one for crises that are most likely to happen, and the other list for those that may not be likely to happen but would be extremely damaging if they did occur. Compare the two lists to see if any vulnerabilities appear on both lists. If so, those are the crises you really need to be prepared for.
  • Ask yourself if there's anything you can do now to prevent a potential crisis. For each vulnerability, list the action steps you intend to take to eliminate or lessen the risk of it becoming a crisis.
  • Develop your plan. Take a look at your list of action steps and determine which ones can be done in advance so you can be better prepared if the crisis happens.