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Grow Your Business Technology

Disaster Recovery Tips for Small Businesses

disaster plan . / Credit: Disaster Recovery Image via Shutterstock

Picking up the pieces after disaster strikes can be one of the hardest moments a small business faces. Surveying the damage, it's easy to feel overwhelmed by all of the steps you'll need to take make your company whole again.

That's no surprise. Less than 60 percent of businesses reopen after a disaster, according to the Federal Emergency Management Agency (FEMA). The fact is, your post-disaster actions and speed directly impact how quickly you're able to get your business up and running again, if at all.

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Whether your business has suffered through a localized fire or a 500-year storm, you'll want to follow an intentional process to get started on the road to recovery. To help you, we connected with industry experts to curate six of the best disaster-recovery tips for small businesses.

Abby Eisenkraft, CEO of Choice Tax Solutions Inc., recommends small businesses "stop and take stock of where they are currently at." Knowing the level of damage to your business assets is going to be the first step in determining what you attack first.

Eisenkraft advises starting with fundamental questions, such as "Are employees okay and available to return to work," "Do I have a way of contacting everyone?" and "Is it safe to return to the premises?"

Even if the building and employees are safe, there's work to be done. Her next question: "Does the company need to acquire new equipment so it can be back in business quickly?"

Answering these questions will help you prioritize what's needed for your recovery and visualize the challenges ahead.

Make sure you take photos of all the damage before you start cleaning up. When you call your insurance company, you'll want proof for your claim.

"Hopefully you have insurance that covers both the physical damage and compensates you for lost business as a result of the storm," says David Waring, co-founder of the small business outlet FitSmallBusiness.com. "This would be in the form of coverage for your building [and its property] as well as business income insurance to replace any income the business loses as a result of the disaster."

Regardless, Wang also advises, "whether you have insurance or not, for businesses affected by natural disasters, such as the recent hurricanes, the federal government may have assistance available, which you can explore." Don't forget, Wang added, "the Small Business Administration has various programs to help with disaster recovery as well."

Resist the temptation to wait for the most opportune time to start your business recovery efforts. Once the danger has passed and you can safely access the damages, you should.

"Every day the company or business is down, it loses money, time and clients," says Lisandra Pagan, Ph.D., an emergency preparedness consultant with Deliberate Plan Consulting. "Every day [owners] are not implementing a recovery plan, they are getting [further] from recovery and reopening." Time can be your enemy when recovering from a disaster.

Pagan advises that business owners "need to start with something. Even if it is a limited service or offering. There needs to be some initial signs of recovery so clients come back, even if that means only offering one item, one service."

"This will help with some money coming in that will ultimately aid with recovery, and even if it's not a lot, it is not another day you are digging the finances deeper [in the red]," she says.

Along with reintroducing your service offerings, you'll need to inform clients that you're back in business. To reassure and keep them on your side as you fully recover, Jay Shelton, senior vice president of risk management services at Chicago-based insurance agency Assurance, recommends "keeping the company's leadership 'visible' and 'reachable.'"

During recovery, clients will have lots of questions and need lots of answers from you and your team. Being accessible and transparent by sharing everything you know can be the linchpin in retaining your clients through the recovery stage and beyond.

Depending on the time of year disaster hits, preparing your business's taxes may not feel like a priority. However, you don't want to wait too long to get your files organized.

Eisenkraft cautions that after a disaster many small businesses "don't think about taxes and records, but they are so important to a business."  

You'll need to make sure the "business still has copies of previous tax records and good backup of the income and expense information for the current year," says Eisenkraft. If everything was lost, "there are ways to reconstruct missing tax records – you can obtain IRS transcripts. You can contact the tax preparer to get copies and any records they may have. You can get data from third parties, such as banks, credit card companies and vendors."

Eisenkraft stresses, "You need to do this immediately, because as time goes on, your memory will not be as clear, and the IRS knows this. Get the records you can, reconstruct the rest, ensure everyone and everything is safe, and then get back to business."

Once you've made some traction in getting your business back to normal, you want to take steps to ensure it could survive another disaster. All of the experts we consulted stressed that the best recovery plans are the ones made before you need them, not afterward.

And, there is no guarantee that a business won't suffer through multiple disasters in its lifetime. Use this experience to put a disaster survival plan in place and update it often as your business grows. If you need help getting started, read our article on disaster planning tips for small businesses.

Charell Star

Charell Star is a digital journalist based in New York City and primarily covers tech, style, beauty, and culture. When she's not writing stories, you can find her filming and producing lifestyle segments for local TV and online media outlets.