As a business owner, you work hard to ensure things go right, investing an incredible amount of time, money and resources to make your venture successful.
But then there’s Murphy’s Law. Murphy's Law basically states that, “Anything that can go wrong, will go wrong.” So, the question you should really be asking yourself is, "Have I invested the time and resources needed to keep my business running if things do go wrong?"
Disasters come in many forms, from natural calamities to man-made havoc. The former are mostly unavoidable; you can’t pinpoint when a flood will soak your inventory. But that doesn’t mean you can’t plan ahead of time on how to deal with one.
The Insurance Institute for Business and Home Safety (IBHS) website is filled with guides and advice to help reduce natural calamities-types of damage, from earthquakes, floods, hail and hurricanes, to thunderstorms, tornadoes, wildfires and more. Its flood guide helps you understand whether your location is at risk and what practical steps to take, with advice on flood-proofing and on those areas on your property that are susceptible to flooding and therefore unwise places to store valuable equipment, documents or inventory.
A classic example of a man-made disaster? Theft. Robert Irvine’s Restaurant Impossible television show is filled with restaurant owners struggling to understand why they’re not in the black, because they don’t see the inventory being taken by their employees.
You need to look at your business as a thief would: Imagine all the ways in which it could incur losses, then put measures into place to prevent those events, whether that means an inventory control system, a second set of eyes on the checkbook or even security guards. Security camera systems are less expensive than they used to be and are very easy to set up.
Workplace injuries are another source for disaster if you’re not prepared. Some jobs are more dangerous than others: Think construction versus office work. So, have you implemented safety training for your riskier positions? Do you have a first-aid kit on hand for common injuries?
If you run a business which is open to the public, like a shop or restaurant, have you made sure it’s safe for visitors? For a free safety review by experts, visit the website of the federal Occupational Safety & Health Administration and schedule a free and confidential review by OSHA experts. (Another federal resource to bookmark: The business section of Ready.gov, a website set up by the Department of Homeland Security to help people plan, test and implement preparedness plans for a range of emergencies.)
Next, consider the financial preparedness section of your disaster plan. Believe it or not, the Internal Revenue Service (IRS) can come in handy when it comes to disasters. Its form 584-B helps owners record the assets of their business and those assets' current values.
This will be integral if you later file a claim. Unfortunately, you’ll have to print out the key pages and fill them out by hand. Otherwise, you can use the form as a template for a record you'll create using your own spreadsheet, accessible from anywhere. If you do the latter, add in a section for photos of each item. All critical business documents should be stored online so you’re not sifting through soggy or smoky paperwork to get back in operation.
Finally, take time to check up on your business’ insurance policy. If you’ve added expensive new equipment, make sure you have adjusted your coverage to cover its replacement cost. Business interruption insurance can help replace the income you might lose as a result of a disaster, but if you will need to replace disaster-damaged inventory, a reserve fund should be ready to go.
The IBHS has summed up the disaster-planning process in a free Business Continuity Toolkit, which you can download. It’s even got a mobile app for convenience.