Home » SBA Reports ‘A Majority Of Small Businesses Lack A Disaster Plan’

SBA Reports ‘A Majority Of Small Businesses Lack A Disaster Plan’

September is Disaster Preparation Month, and a great time to see if your business needs more in its disaster plan.
September is Disaster Preparation Month, and a great time to see if your business needs more in its disaster plan.

In an article written by Jeremy Field, PNW Regional Administrator for the U.S. Small Business Administration (SBA), an estimated one in four businesses won’t re-open after a major disaster, according to recent data.

The economic impacts from a disaster are crippling, from the losses of inventory, property and revenues, to the rippling effects of employees losing wages and vendors losing distributors.  The arson fires in Fremont, where one of the four businesses hit didn’t re-open and those remaining suffered unforeseen damages, gave a great lesson in the need for planning and insurance.

After four businesses in Fremont were hit by arson on Dec 24th, three were able to reopen, in time...  Photo provided by Pixabay.com
After four businesses in Fremont were hit by arson on Dec 24th, three were able to reopen, in time… Photo provided by Pixabay.com

The human impact of a disaster is devastating, and overwhelming, but pile on top the need to rebuild and restore a business without proper resources or contacts…

Studies show an estimated two out of three small businesses (in some cases, it is as high as three out of four,) don’t have an emergency plan in place.  Worse still, it is not a matter of if a disaster will strike, it’s a matter of when.

Being prepared for any kind of emergency – flood, fire, utility failures, earthquake, etc. – means a business will rebound sooner, with less impact on financial reserves.  September is National Disaster Preparedness Month, and gives us all a great reason to take steps now to prepare:

  • Review hazard and flood coverage to ensure a policy is in effect
  • Have insurance policy information, phone numbers and other resource information handy
  • Know who to call and what a reasonable restoration plan would look like for your business
The Small Business Administration offers Disaster Assistance loans and other services.
The Small Business Administration offers Disaster Assistance loans and other services.
  • Keep an updated list of all employees’ contact information, plus emergency contacts, to reach out in any disaster, or during recovery
  • Obtain a line-of-credit, or build a cash reserve, for enough financial resources to keep your business running for three months
  • Move, or copy, important business records to an offsite location, or save as much as possible to the cloud

Preparedness can always be established and built upon, step by step.  However, once disaster hits, the SBA Office of Disaster Assistance has staff available to aid small businesses with coordinating federal, state and local recovery efforts.

When a business closes, in affects the owner, employees and the whole community around it. Photo by K. Lindsay Laney, Jun '11
When a business closes, in affects the owner, employees and the whole community around it. Photo by K. Lindsay Laney, Jun ’11

“Many people I talk to are surprised to learn that in the wake of a declared disaster, the SBA assists in the rebuilding and economic recovery of a community by providing affordable, timely loans to businesses of all sizes, nonprofits, homeowners and renters to cover uninsured losses,” wrote Jeremy Field.  “These loans provide working capital to a business or organization until normal operations can resume.”

Take time this month to add to your emergency plan, or talk to your favorite small business owner about the need for establishing a disaster response.  Visit the SBA website (click here) for more ideas.