Disasters, I know we all hate that word. As humans, we gird ourselves and simply say, “It won’t happen to me”. But the data shows that it’s not if it’s going to happen, it’s when is it going to happen.
According to the Small Business Administration (SBA), 40% to 60% of small businesses fail following a major disaster. The number of presidentially declared disasters has more than doubled in recent years. However, many disasters don’t affect a large number of people like these declared events do. In fact, fire is the leading business disaster.
If that is not bad enough, researchers estimate that approximately: half of the businesses do not survive their first 5 years, and 8 out of 10 fail within the first 3 years after a disaster.*
Small Businesses have unique challenges that are quite different from their larger counterpart. Since 52 % of businesses are operated from the owner’s home or property their ability to recover is harder simply because they have to focus on two recovery efforts. There is never enough time to get them both done quickly and easily. If their business is in their home, there is no place for the work to continue. Property damage for a small business owner impacts BOTH the family and their business.
While owning a small business may seem like the American Dream, owning a small business has many challenges. But after a disaster, the challenges become more profound. There seem to be recurring views of these owners both before and after the disaster.
Here are 7 challenges Small Business Owners face after a disaster:
1. Illusion of Security
2. Nothing could be done to protect against this
3. Complete 360-degree disaster for the individual
4. Self-imposed limits
5. Imprudent use of financial resources
6. Not understanding what is happening to their customer base
7. Assumption everything will get back to normal
Starting a business is a big achievement for many entrepreneurs, but maintaining one is the larger challenge. There are many standard challenges that face every business whether they are large or small. The largest challenge for a small business owner is planning.
Small business owners invest a tremendous amount of time, money, and resources to make their ventures successful, yet, many owners fail to properly plan and prepare for disaster situations. You can protect your business by identifying the risks associated with natural and man-made disasters, and by creating a plan for action should a disaster strike. By keeping those plans updated, you can help ensure the survival of your business.
When disaster strikes, having a plan and being able to put it into immediate action can mean the difference between staying open to service the needs of your customers and community or shutting down for a few days.
I know, not another plan! Who has time for that?
Resilience is different from preparedness. Where preparedness is something that you do; resilience is something that you become. In becoming more resilient, you as the owner should take intentional action. Do one thing today. (Just one thing). Do you back up your data? No, then get that done. Do you have an emergency contact list for your employees, suppliers, and major clients? No, then get that done. Do you review your insurance policy every year with your agent? No, then get that done. Little by little, doing one thing moves you closer.
You’ve finally achieved your dream. Don’t lose it to a power outage, hacker disruption, fire, earthquake, or another disaster. If you’re not prepared, a disaster could put you and your employees at risk, possibly shutting down your business forever.