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Grow Your Business Technology

Disaster Recovery Tips for Small Businesses

SMB disaster recovery tips
Credit: Arjuna Kodisinghe/Shutterstock

According to the Federal Emergency Management Agency (FEMA), 40 to 60 percent of small businesses never reopen their doors following a disaster. That's a disheartening statistic for any owner trying to pick up the pieces following a devastating fire, storm, platform hack, security breach, riot or other unexpected catastrophe.

As overwhelmed as you might feel, it is important to know that your post-disaster actions and speed will directly impact how quickly you're able to get your business up and running again. If you want to be one of the businesses that survive, you'll need to be intentional about the process you follow to get on the road to recovery.

To help you get started, we connected with industry experts to curate seven of the best disaster-recovery tips for small businesses. 

Abby Eisenkraft, CEO of Choice Tax Solutions Inc. recommends small businesses "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. She advises starting with fundamental questions like are employees okay and available to return to work? Do you have a way of contacting everyone? Is it safe to return to the premises?

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

Answering these questions helps you visualize the challenges ahead and prioritize the steps involved in your recovery.

Make sure you take photos of all the damage before you start cleaning up. When you pick up the phone to 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."

Waring further advises, "Whether you have insurance or not, for businesses affected by natural disasters like hurricanes, the federal government may also have assistance available, which you can explore." And, Waring added, don't forget that, "the Small Business Administration has various programs to help with disaster recovery" as well." [Interested hard drive recovery services? Check out our best picks on our sister site, Business.com.]

Small businesses may not always have an advantage when going up against larger competitors, but in the immediate days following a disaster, being lean may be an asset in recovering more quickly.

"Being small means [you] do not have to conduct endless meetings to hash out approaches and strategies," says Evan Bloom, CEO of Fortress Strategic Communications, a PR company specializing in crisis communications and enterprise risk management PR. "Small companies are less likely to have obstructive red tape, and they have greater freedom to make timely, decisive decisions."

Leverage your size and responsiveness to make necessary decisions fast and get your doors back open.

Resist the temptation to wait for the most opportune time to start your business recovery. Once the danger has passed and you can safely assess the damage, 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 they are not implementing a recovery plan, they are getting further from recovery and reopening." Time can be your enemy when trying to recover from a disaster.

Pagan advises that business owners "start with something. Even if it is a limited service or offering. There need 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," 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 executive risk at Chicago-based insurance agency Assurance, recommends "keeping the company's leadership visible and reachable."

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

Depending on the time of year disaster hits, prepping for taxes may not feel like a priority. However, don't wait too long to organize your files.

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

Eiskenkraft adds that businesses will need to make sure "[they] still have copies of previous tax records and a good backup of their income and expense information for the current year," she says. 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 on track, you want to take steps to ensure it could survive another disaster. The experts we connected with stressed that the best recovery plans are the ones made before a crisis, not after.

There is no guarantee that a business won't suffer through multiple disasters in its lifetime. Use the experience to put a disaster survival plan in place for your business and update it often as your business grows. If you need help getting started, read our 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.