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Big businesses, small shops reap benefits of disaster plan

Whether you own a multi-million dollar corporation or the corner market, theres one thing you cannot afford to be without–a disaster plan.

Each year, at least 25 percent of businesses closed down by fires, tornadoes or similar disasters are unable to reopen. In many cases, a disaster plan could have changed that fate.
Whether you own a multi-million dollar corporation or the corner market, there's one thing you cannot afford to be without—a disaster plan.

Each year, at least 25 percent of businesses closed down by fires, tornadoes or similar disasters are unable to reopen. In many cases, a disaster plan could have changed that fate.

“There's no substitute for preparation,” says Carol Clark, director of Austin Peay's Tennessee Small Business Development Center. “No one expects their business to be damaged or destroyed, but knowing how to get your business back up and running if it does happen is invaluable.”

Creating a disaster plan is especially sensible since many precautions are free or of little cost. Steps of a disaster plan include: creating backups of computer data and storing them offsite; establishing an alternative method of communication with employees, customers, suppliers and other persons associated with your business; and reviewing insurance policies as your business grows to ensure sufficient coverage.

“One of the greatest mistakes business owners make is not knowing what their insurance policies will cover,” says Clark, adding that every business owner should consider business interruption insurance, which reimburses owners for lost profits and necessary continuing expenses during a temporary shutdown.

Clark says developing relationships within the local business community also improves a business' chances of survival.

“Often, displaced businesses are temporarily housed by complementary or competitive businesses with extra workspace or additional access to computers, phones and other technology,” she says. “Involvement in organizations such as the local Chamber of Commerce will provide opportunities to develop such relationships.”

Contact information for fellow business owners, along with that of employees, customers and suppliers should be included in a disaster plan, along with the following:

•A copy of your insurance policy and contact information for the claims department and your insurance representative
•Information pertaining to the software and hardware used to operate your business
•Bank information and account numbers

For further details about preparing for disaster, access “A Disaster Planning Toolkit for the Small Business Owner” at www.sba.gov/disaster/getready.html.
—Terry Stringer