How to Strengthen Your Business Against the Threat of Natural Disasters

Natural disasters have derailed too many businesses. By preparing in advance, you can keep your employees safe and ensure business continuity no matter what mother nature sends your way.

learn more about Chuck Miccolis

By Chuck Miccolis • Jan 1, 2023 Originally published Jan 1, 2023

Shutterstock

Opinions expressed by Entrepreneur contributors are their own.

As climate change intensifies, severe weather is on the rise. According to the World Meteorological Organization, the number of extreme weather events over the last 50 years has increased fivefold. In addition to the devastating human toll, these disasters damage and even ruin businesses and local economies. In the U.S. alone in 2021, the toll from hurricanes, wildfires, flooding, tornadoes and other natural disasters totaled approximately $145 billion.

Entrepreneurs and small business owners often suffer outsized impacts. According to FEMA, almost 40% of small businesses never reopen their doors after a disaster. This can be due to loss of property, the displacement of employees and customers and the disruption to business operations that these events cause.

Fortunately, much of this damage is avoidable, and it starts with having a plan. Business leaders can take easy and inexpensive actions to make their companies more resilient against extreme weather. Contingency planning is important regardless of the region your business is in or whether you are coastal or inland. Disasters can strike anywhere. As the old saying goes, "If you fail to plan, you plan to fail."

Here are several tips to consider as you prepare for potential disasters:

Related: 5 Steps to Getting Your Company Ready for a Natural Disaster

Keep your people safe

Your business's first concern when planning for a natural disaster is to keep your employees, your partners and yourself safe. To do so, you must first determine the type of disasters most likely to occur in your area. If you are on the West Coast, it may be wildfires or earthquakes. Along the East and Gulf coasts, it may be hurricanes or flooding. In the Southeast and Midwest, it may be tornadoes or derechos.

By understanding the threats, you can assess whether your contingency should include an evacuation plan, shelter-in-place protocols or both. If designing an evacuation plan for a disaster in which you need to leave the campus, it's important to have several routes identified in case of road closures and at least one form of transportation in mind. Likewise, evacuation plans for events that cause employees to leave the building, but not the property, should be created to include designated gathering spots for staff check-in. On the other hand, shelter-in-place plans should include knowing where the safest place in your office or facility is, such as a properly designed safe room or shelter, basement, hallway or storage room — and ensuring there is ample free space for your team to gather.

You also want to have an emergency communication plan in place. To ensure that you can quickly disseminate essential information to your team, maintain an up-to-date contact list, and have draft communications ready that can quickly be tailored and sent. Cell towers are often down during storms, so it's important to send information on multiple channels, including email in addition to text or voice calls.

If you manage a larger team, it may also help to have a disaster email address so that you can collect all disaster and recovery-related inquiries from staff in a single inbox.

Related: How to Keep Your Business Running During a Natural Disaster

Prepare an operational resiliency plan

After ensuring team safety, you will need to prioritize maintaining your operations. In a disaster, your workforce, equipment, supply chain, inventory and communications can all be compromised, which could force a temporary closure if you are unprepared. Previous disasters have shown that temporary closures often lead to permanent closures or to lost market share to competitors who were able to stay open.

If you're selling goods online, you may have a warehouse full of inventory. Have a plan for how to pack up that inventory, gather critical employees quickly and set up shop somewhere else temporarily. You may also consider a plan for backup supplier relationships. Who are your vendors and suppliers of last resort in the event you lose access to existing relationships?

Next, consider backup power sources. Regardless of whether you're working out of your house or running a large warehouse, it's important to have a generator proportioned to your power needs. Even a small gas-powered generator can ensure your phones are charged and your laptop works, enabling you to stay online and maintain a base level of operations during a crisis.

Your plan should also include backup information for your critical data and IT systems, which can easily go down from power surges or water damage. Determine which data and records are vital to perform the critical functions of your business, and be sure they are backed up on one or more types of media — or even better, the cloud.

The Insurance Institute for Business & Home Safety (IBHS), a nonprofit scientific research organization, has created two programs for businesses to protect their bottom lines. EZ-Prep, a free online guide including customizable checklists, can help you build a plan to reduce physical damage and respond to operational disruptions caused by severe weather. This program complements IBHS's OFB-EZ program, which is a simple-to-use business continuity program focusing on recovering after the initial emergency response.

Related: How to Create a Resilience Plan for Your Business

Strengthen your building

For most businesses, a physical structure is critical to operations — whether it's an office building, a storefront or your own home. If the structure fails, the loss of resources, time and cash can be catastrophic.

When it comes to protecting your structure, it all starts with the roof. Strong roofs are a front-line defender against high winds and severe rain. When a roof fails, it can initiate a cascade of damage to a building's interior and structure. While making improvements to a roof can cost a few thousand dollars, it could save you hundreds of thousands or even millions in potential damages.

To provide the best possible protection for your facility when replacing the roof, install an IBHS-designated FORTIFIED™ Roof, centered around a construction standard based on years of research into what causes roofs to fail in high winds. A FORTIFIED Roof has third-party verification that it meets certain quality standards, including the use of high wind-rated roof coverings and a sealed roof deck system to reduce the potential for water entering the building by 95%.

In addition to strengthening the roof, pursuing additional resiliency measures based on your risk tolerance and assessment is beneficial. If you're in a flood zone, you might want to install flood protection. If you're at risk of windborne debris, you may want specialized shutters for added protection.

Fortunately, disaster resiliency doesn't have to be overwhelming, and it doesn't have to be astronomically expensive. Doing something is always better than nothing.

The most important step is simply to have a plan. Businesses are decimated when they aren't prepared. Everyone thinks it will never happen to them, but it can — and in the face of climate change, it is increasingly likely that it will. But with a proper plan in place, you can significantly reduce or even eliminate damages to your business. And most importantly, you might save the lives and livelihoods of your team.

Chuck Miccolis

Entrepreneur Leadership Network Contributor

Managing Director of Commercial Lines at IBHS

Chuck Miccolis provides engineering and technical support for commercial building-related hazard mitigation initiatives at the Insurance Institute for Business & Home Safety.

Related Topics

Editor's Pick

This Co-Founder Was Kicked Out of Retailers for Pitching a 'Taboo' Beauty Product. Now, Her Multi-Million-Dollar Company Sells It for More Than $20 an Ounce.
Have You Ever Obsessed Over 'What If'? According to Scientists, You Don't Actually Know What Would Have Fixed Everything.
Most People Don't Know These 2 Things Are Resume Red Flags. A Career Expert Reveals How to Work Around Them.
Business News

Massive Fire At Top Egg Farm Leaves Estimated 100,000 Hens Dead. What Does This Mean For Egg Prices?

Hillandale Farms in Bozrah, Connecticut went up in flames on Saturday in an incident that is still under investigation.

Business News

These Two Cars Are Stolen So Often Insurance Won't Cover Them

Progressive and State Farm have dropped some older Hyundai and Kia models after learning that a design flaw makes them easy to start without a key.

Business Solutions

5 Procurement Trends To Keep on Your Radar for 2023

Procurement professionals must adapt to inflation and a shortage of skilled labor in the face of an economic recession. Investing in a workforce paired with retraining and development strategies will put your company on top amid economic uncertainty.

Business News

Out With the Kibble and In With the Steak. The World's Richest Dog Has a Net Worth of $400 Million – And a New Netflix Docuseries Too

'Gunther's Millions' is set to unpack the pooch's mysterious fortune and what those around him have done with his inheritance.

Business News

'This Just Can't Be for Real': Fyre Festival Fraudster Billy McFarland is Now Hiring For His New Tech Company -- And He's Already Selling Merch

McFarland was released from house arrest last September and is currently being ordered to pay $26 million in restitution to fraud victims.