hurricane damageIs your small- to medium-sized business prepared to survive the physical and financial devastation of a natural disaster?

Hurricanes impact Texas Gulf Coast businesses of all sizes, but smaller businesses can be the most severely impacted for a number of reasons.

Smaller businesses often operate from a single location so extensive damage or days without utilities can be devastating. Because these operations get a majority of their business from clients and customers in the surrounding area, income can flow to a trickle as those clients and customers focus on their own recoveries.

Small Financial Reserves

Small businesses also may have smaller financial reserves to tide them over until business resumes. Researchers estimate that small businesses lose an average of $3,000 a day after closing due to a major storm. Research also shows that a quarter of small- to medium-sized businesses hit by a major storm don’t reopen.

That’s the bad news if you own a business on the Texas Gulf Coast. The good news is that you can reduce your business’s vulnerability by having a business resiliency and disaster recovery plan. Most individuals on the Texas Gulf Coast have hurricane plans for their homes but a majority of small business owners don’t have plans to protect their livelihoods.

As with your home and personal property, have a hurricane preparedness checklist for your business. Online checklists and planning guides make it easy. The U.S. Small Business Administration has a number of planning guides to help prepare for and recover from a disaster. This will help you plan to protect your property and important documents and data, as well as facilitate recovery after a storm.

Employee Preparedness

If you have employees, now is the time to ensure that your policies address issues related to a natural disaster. Have you shared elements of your preparedness plan with your employees? Do you have a crisis communications plan? If your business is shut down temporarily, will some or all employees continue to be paid? Will you allow them to draw on their vacation and sick time? If banks are shut down, will you provide payroll-cashing services?

Also consider your business’s financial needs and the cash reserves you need to have on hand. How much will you need to tide you over until your business is up and running at full speed? It could be weeks or even months.

Peace of Mind

From our experience in helping clients develop and test emergency preparedness plans, the depth and breadth of each step depends on your business and industry; federal, state or industry regulations; revenue and expenses, product/service; home or office base; number of employees; and customer needs.

Like many business strategic initiatives, creating a disaster plan takes time, diligence and commitment. The investment is worth it because it will give you great peace of mind and will help you get back to business faster after a storm.

Sandy Cody is chief executive officer of Draker Cody Inc., a business management consulting company with offices in Houston and Albuquerque, N.M.