Do I need a Disaster Recovery Plan?

Stop for a moment and think about all the time and resources you’ve invested in your small business. Now, imagine that it’s all gone—facilities, equipment, everything. What do you do?

Every year, this hypothetical question becomes very real to thousands of small business owners who suffer losses due to fires, natural disasters, and other events.

Although many potential disasters are unpredictable, a thoughtful, proactive disaster management plan can mitigate their effects on your business, and help speed your return to normal operations. True, disaster planning may not be pleasant to think about, but the consequences of not doing it are far worse.

Here are some tips for developing a disaster management strategy for your small business:

- Identify potential hazards. Consider both natural events (e.g., hurricanes, floods, earthquakes, and ice storms) as well as man-made disasters such as fires, toxic material spills, civil unrest, and terrorism. While your business may not be directly affected, such events could disrupt your utilities, logistics, and supply chains.
- Develop operational contingency plans. Assess the feasibility of operating out of rented office space, a nearby storefront, or even your home, and what equipment/resources will be needed (e.g., computers, data files, inventory). Important documents, back-up copies of computer records and software, and other vital information should be stored in a fireproof container, or at a secure off-site location.
- Ensure the safety of employees and customers. Develop an evacuation plan that includes access to shelters, hospitals, and other emergency services. Keep emergency telephone numbers clearly posted, and maintain up-to-date emergency contact and essential medical information for all employees.
- Perform a safety inventory. Regularly clean and test smoke detectors, and change the batteries at least once a year. Make sure you have well-stocked first-aid kits, fully charged fire extinguishers, and a fresh supply of all types of batteries used in your business. If you have portable generators for emergency power, make sure that the fuel is fresh and safely stored.
- Review your business insurance coverage. At a minimum, your coverage should be enough to get your business back in operation, and cover the replacement cost of essential facilities. Note that most general casualty policies do not cover flood damage, nor may they apply to special tools or equipment. Also consider purchasing business interruption insurance, which can assist with ongoing expenses during a forced shutdown.


Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties