Disasters, I know we all hate that word. As human beings, we stick around and just say, “It won’t happen to me.” But the data shows that it’s not if it’s going to happen, it’s when it’s going to happen.
According to the Small Business Administration (SBA), between 40% and 60% of small businesses fail after a major disaster. The number of disasters declared by the president has more than doubled in recent years. However, many disasters do not affect a large number of people as these declared events do. In fact, fire is the main business disaster.
If that’s not bad enough, researchers estimate that roughly half of businesses don’t 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 counterparts. Since 52% of businesses are operated from the home or property of the owner, their resilience is more difficult simply because they have to focus on two recovery efforts. There is never enough time to do both quickly and easily. If your business is at home, there is no place for work to continue. Property damage for a small business owner affects BOTH the family and their business.
While owning a small business may seem like the American dream, owning a small business presents many challenges. But after a disaster, the challenges deepen. There seem to be recurring views from 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. Reckless use of financial resources
6. Not understanding what is happening to your customer base.
7. Assuming everything will return to normal
Starting a business is a great achievement for many entrepreneurs, but keeping one is the biggest challenge. There are many standard challenges faced by all businesses, large or small. The biggest challenge for a small business owner is planning.
Small business owners invest a tremendous amount of time, money, and resources to make their businesses successful; however, many homeowners do not adequately plan and prepare for disaster situations. You can protect your business by identifying the risks associated with natural and man-made disasters and creating a plan of action in the event of a disaster. By keeping those plans up to date, you can help ensure the survival of your business.
When disaster strikes, having a plan and being able to put it into action right away can mean the difference between staying open to serve the needs of your customers and the community, or closing for a few days.
I know, not another plan! Who has time for that?
Resilience is different from preparation. Where preparation is something you do; resilience is something you become. As you become more resistant, you, as the owner, should take intentional action. Do one thing today. (Just one thing). Do you make a backup of your data? No, then do it. Do you have a list of emergency contacts for your employees, suppliers, important customers? No, then do it. Do you review your insurance policy every year with your agent? No, then do it. Little by little, doing one thing brings you closer.
You have finally achieved your dream. Don’t lose it to a power outage, hacker outage, fire, earthquake, or other disaster. If you are not prepared, a disaster could put you and your employees at risk, possibly closing your business for good.
