5 Ways To Keep Your Business From Going Under
If you own a small business, you’re probably aware of the statistic that up to 8 out of 10 new businesses will fail. And if you are one of the few that made it past the first two years, you should also be aware that you’re not totally out of the woods. If you experience a major disaster or other loss, it can jeopardize all the money, time, and planning you’ve invested into making your business succeed.
ABI Insurance gives you 5 things to include in your Disaster Recovery Plan to keep your business from going under after damage or loss.
In fact, 60% of small businesses will go under within 2-3 years after a big loss – IF there’s not a recovery plan already in place, for cases such as fire loss, water damage, business interruption, cargo loss, or similar. You can significantly increase your chance of business survival by creating a Disaster Recovery Plan. Here are 5 things you should include in your plan:
Build Up Deductible Reserves
Make sure you prepare for the worst by regularly setting money aside in case you need to employ your insurance policy. Otherwise, you may be stuck with dipping into important resources that you may need for other repairs or items that aren’t covered from the loss. Also, keep in mind that raising your deductible may not save you money, depending on your situation. Consult with your insurance agent to get the right overall coverage and deductible for your business.
Arrange For Data Access and Backup
Keep a computer backup that is protected in a safe or even offsite. Consider an additional cloud backup so that you can access anywhere, which may be a lifesaver if you and your team need to work offsite for awhile, due to damage or loss. Make sure you’ve tested your backup too! Consult with a data storage professional if you have a large amount of crucial information stored for you and your customers.
Prepare For Inventory Loss
If you carry an inventory of physical product, take the time to determine the amount you regularly need each week, month, and quarter, so you know exactly what you need to replace in a loss. Consider and plan for expedited shipping to replace what’s needed quickly in case an emergency does occur – and calculate the costs ahead of time. Determine how you will allocate any loss with your accounting department or company in advance, and don’t forget to revisit this estimate annually, as your business demand changes!
Arrange For Auxiliary Equipment
Have a plan in place for alternate facilities and equipment that you can utilize in the case that your current business location or equipment is damaged. Consider outlining whether you will allow employees to work from home, and if so perhaps you can supply them with laptops. If you have customers that have a stake in helping you, they may be willing to be part of a backup plan. Or perhaps there are similar facilities with equipment you can rent. Don’t forget to look at both short-term and long-term possibilities!
Create An Emergency Blueprint
Outline a step-by-step guide for your business’ response to an emergency. Designate which personnel is in charge of each area. For example, who will be communicating with your staff, who will contact emergency services, a list of what to take if you have to evacuate, etc. You’ll definitely want to design all of the particular operations and processes with agility and resilience in mind, as the nature of most disasters is completely unpredictable.
Make it clear to your staff the particulars of your Disaster Recovery Plan, and where they can find it! And, of course, don’t forget to outline the cost of your insurance deductible, and which personnel is in charge of contacting your ABI Insurance Agent! And call us if you have any questions about your insurance coverage in the case of a disaster. Your agent can advise you on any updates or changes you may need to make.