Get All Access for $5/mo

4 Ways to Ensure Your Startup Will Survive Disaster A little preparation can shield your business from suffering a total loss should catastrophe strike.

By Sheldon Yellen Edited by Frances Dodds

Opinions expressed by Entrepreneur contributors are their own.

Henrik Sorensen| Getty Images

In September, record flooding forced more than 10,000 Cedar Rapids, Iowa, residents to evacuate their homes and businesses. The Cedar River water levels exceeded 22 feet -- a full six feet above major flood stage -- deluging fields and properties in the area. It comes on the heels of a fatal Louisiana flood that affected 60,000 homes and took the lives of 13 people.

Spanning thousands of acres, the flooding was caused by an unbelievable amount of rain -- two feet in three days -- starting in August. Rivers overflowed, with stream depths remaining above flood stage for as many as 10 days. But even as waters begin to recede, residents faced an uphill journey to recovery.

My BELFOR staff members and I know the devastation that disasters such as these can cause. Late one night, we got a call that a fire had started in the strip mall in the shop next to Anthony's, one of our staff's favorite little mom-and-pop places. When we showed up to evaluate the damage, the owner was in tears, but he wasn't completely devastated. He had prepared for this. His employees were safe, and he was able to reopen in a new location. He lost the building -- but not the business.

In the early days of a startup, many people are so consumed with building traction and surviving the first couple of years that they don't think about how to protect the business from catastrophes. But disasters don't always wait for your business to take off. They can happen at any time, and they can close your doors forever.

If you're running a startup, you're pouring your life into your new business. Don't risk losing it all in an instant. You can take steps beyond insurance to make sure that if disaster strikes, your business will survive.

1. Establish action plans.

Just as children practice tornado drills in school so they know the best ways to escape danger, your employees need to know what to do in emergency situations. Yet about 23 percent of organizations with action plans have never tested them -- pretty much defeating the purpose of the plan altogether. You will never anticipate the challenges of a real disaster if you never test your plan beforehand.

Make preparedness a part of your training. Everyone should know what to do and where to meet afterward so you can quickly determine whether everyone is safe. If your business has patrons or clients in your building, train your people to help get them to safety, too. Keep a battery-operated radio in the building so you can stay informed if you need to take cover.

Related: Is Your Business Prepared to Handle an Unexpected Emergency?

2. Back up vital information.

Protect essential documents and vital information by backing them up ahead of time. Your physical building is rarely essential to a business, but many companies can't function without client or customer information or certain documentations of business history.

This past February, Hollywood Presbyterian Medical Center learned just how much a failure to back up data could cost. The hospital actually had to pay hackers to restore its health data, email, etc., reportedly spending about $17,000 in bitcoin.

Related: 10 Data Security Mistakes Startups Can't Afford to Make

3. Know how to inspect your building in the aftermath.

Some damage may not be obvious at first but can cause serious problems down the line. It's hard to imagine that one disaster could bring your business to its knees. But about a quarter of small businesses don't reopen in the aftermath. Examine potential structural issues and gas and power lines. A property restoration company can be a huge help with the physical challenges.

Related: Why Every Small Business Needs a Backup and Disaster Recovery Plan

4. Know what to look for in a property restoration company.

An emergency property restoration company can help prevent further destruction, provide temporary power and protect your assets. When exploring your options, ask about timing and strategies of response systems, and make sure the company has representatives accessible at all times. Keep in mind that you can save a lot of money and heartache if the company handles every aspect of damage concerns. And to ensure you're hiring a reputable partner, check to see whether it's a IICRC- or BOMA-certified company.

The worst time to figure out what to do in a catastrophe is after it happens. You can't always prevent fires and natural disasters, but a little preparation can shield your business from suffering a total loss. For the sake of yourself and your employees, make a plan for how you will rebuild your company if a disaster strikes. You'll never regret protecting your business from the unexpected.

Sheldon Yellen

CEO of BELFOR

Sheldon Yellen is the CEO of Birmingham, Michigan-based BELFOR, the worldwide leader in property restoration and disaster recovery. BELFOR has more than 6,400 employees in 300 offices spanning 31 countries. Sheldon was featured on CBS’s Undercover Boss.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Business News

How to Be a Billionaire By 25, According to a College Dropout Turned CEO Worth $1.6 Billion

Austin Russell became the world's youngest self-made billionaire in 2020 at age 25.

Living

Taylor Swift Has a Lucky Number. And She's Not the Only High Performer Who Leans Into Superstitions to Boost Confidence.

Even megastars like Swift need a little extra something to get them in the right mindset when it is game time.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Marketing

SEO Trends You Need to Be Aware of Right Now, According to a Seasoned Pro

Navigate the future of search engine optimization to elevate your online presence and drive meaningful engagement.