Disasters come in all shapes and sizes, and nobody is immune. From weather-related catastrophes like flooding or ice damage to cybersecurity issues, these emergencies are rarely, if ever, easy to predict and can seriously disrupt the normal flow of business.
No matter your business model or offerings, it’s critical to keep in mind that anything can happen and careful planning and preparation can go a long way toward helping your business recover.
In fact, every business owner can and should take action to help protect their business in the event of an emergency. Here are six precautions to take so you’re ready for anything and have a path forward following unforeseen events.
The first step in protecting your business from a disaster is to understand risks and potential threats. Is your business near a waterway, where flooding may be prevalent? How might online or cyber threats, such as data breaches, impact your business operations or customers? What do your safety systems look like at physical locations, such as fire alarms and extinguishers?
A focus on prevention should include regular audits of your systems, processes and vulnerabilities for identified potential threats. This can help you identify gaps and prioritize any investments that may be needed to safeguard your business.
If you’re concerned about business email compromise through methods like phishing, for example, you may choose to invest time and resources into educating employees to prepare for and take steps to prevent this style of attack.
When it comes to security, your banking partner can play an important role. Our Treasury Management team has helped businesses train employees to improve security, as one example. We also offer services like Positive Pay, which helps prevent checking and ACH fraud by comparing checks used for payment against a list of authorized checks.
Emergencies can disrupt business cash flow and it’s possible that you’ll need immediate access to funds to cover yourself, your employees and your losses as you recover and rebuild. Every business owner should consider options for funding as part of its disaster planning efforts.
One method is to create an emergency fund to cover payroll and expenses during difficult, unexpected times. Some business owners leverage a line of credit to ensure they can access extra funds when they need them. Your banking partner can help you decide which forms of financing will best fit you and your situation, should you need them.
The entire point of insurance is that while you hope you may never need it, it can come in handy when something happens that’s out of your control. However, insurance is not a one-size-fits-all package and different types of businesses need to consider their specific needs when seeking coverage or assessing whether their current provider or plan is right for them.
Insurance can cover a range of concerns from property damage to workers’ compensation and more. Ensuring that you have options to help cover any losses following an unforeseen event can help keep your operations moving as you recover from what happened.
Regularly assessing your coverage can also help. As businesses grow and change, so do their needs; what might have been a good fit five years ago may not cover your business needs today. Understanding what your coverage looks like, as well as how long claims can take to process should you need it, can be useful during the recovery process.
Documenting physical assets is a critical step in both understanding your losses and filing claims with your insurance provider. Having a detailed, full list ready in the event of a disaster will help make casualty loss claims easier to file, especially as you deal with the stress that comes with an emergency.
A room-by-room list of equipment and valuables, including specific information like serial numbers or models, will help as you recoup losses and get your business back in order. This is especially crucial if you lease equipment, as it will help you replace what you’ve lost. You can even take videos or photos to help supplement and back up your claims.
Importantly, you should remember to back up and update these detailed records regularly. You may decide to use a combination of physical and digital records as part of your disaster planning efforts to ensure these important records can’t easily be destroyed or deleted.
Your inventory list isn’t the only record that should be backed up. Any important documentation, from bank statements to tax returns to insurance and employment records, should be kept in more than one safe place where it can be easily accessed in the event of a loss.
Paper documents should always be scanned and stored on the cloud or in other digital formats that can be accessed from another location if needed. This can include W-2s, tax returns, and any documents you need to keep your business running on a day-to-day basis.
Creating a continuity plan is critical to ensuring you can not only recover from any issues but keep what business operations you can conduct running as smoothly as possible in the meantime. In creating your initial emergency plan, be sure to assess which functions, equipment, processes and personnel are the most vital to keep your business going.
You’ll need to know how to manage accounting, IT, vendors, customer communications, payroll and more, and should also have a plan for who takes responsibility for each part of this plan.
Succession planning, too, is helpful to develop ahead of when you think it will be needed in the event of an unforeseen emergency. Having safeguards for your financial operations and expenses in addition to your regular business operations will help keep you on track to recover from a disaster.
However, emergency planning isn’t something you can “set and forget.” Regularly evaluating and testing your plan and updating it where necessary can ensure that you don’t panic in the wake of a disaster. Technology, for example, develops quickly and new cyber threats are emerging that may require plan updates. Running through potential scenarios and testing your plans can also help ensure that they stay practical, feasible and up-to-date.
Disaster Planning Starts Now
None of us can predict the future, and it’s impossible to know if or when a disaster may impact your business. Preparing well in advance, though, can help you recover more quickly and with greater ease. The best time to plan for a disaster is before it happens. Taking these steps ahead of time not only gives you peace of mind now, but your future self will thank you in case the plan is ever needed.
Rockland Trust is your business banking partner. Contact our team of advisors to learn more about how to plan financially for the future.
