Disasters, I know we all hate that word. As humans we gird ourselves and just say, “It won’t happen to me.” But the data shows that it is not if it will happen, but when it will happen.
According to the Small Business Administration (SBA), between 40% and 60% of small businesses fail after a major disaster. The number of presidentially declared disasters has more than doubled in recent years. However, many disasters do not affect the large numbers of people that these declared events do. In fact, fire is the main business disaster.
If that’s not bad enough, researchers estimate that about 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. With 52% of businesses operating from the owner’s home or property, their ability to recover 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 in your home, there is no place for you to continue the work. 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 comes with many challenges. But after a disaster, the challenges run deeper. 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 can 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. Assume that everything will return to normal
Starting a business is a great achievement for many entrepreneurs, but maintaining it is the biggest challenge. There are many standard challenges faced by all businesses, whether large or small. The biggest challenge for small business owners is planning.
Small business owners invest a great deal 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 should a disaster strike. By keeping those plans up to date, you can help ensure the survival of your business.
When a disaster strikes, having a plan and being able to put it into action immediately 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, it’s not another plan! Who has time for that?
Resilience is different from preparedness. Where preparation is something you do; resilience is something you become. As you become more resistant, you as the owner must take intentional Values. Do one thing today. (Just one thing). Do you back up your data? No, then do that. Do you have a list of emergency contacts for your employees, vendors, important customers? No, then do that. Do you review your insurance policy every year with your agent? No, then do that. 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’re not prepared, a disaster could put you and your employees at risk, possibly closing your business forever.