Is your business prepared for the unexpected?

It can happen at any time: a fire, flood, storm, or even a prolonged power outage. These events can cause significant, and even irreparable, damage: Over 60% of small business owners lack a recovery plan, and 20% of those who close after a natural disaster never reopen, according to Insureon, a small business research provider.

The biggest mistake business owners can make when it comes to disaster planning is thinking they don't need it. The reality is that the number of major disasters hitting the U.S. each year has more than doubled. Smaller events, such as floods from leaking equipment and smoke damage from small fires, also pose a threat.

Taking even a few steps to assess your current disaster readiness and making small changes to lessen your risk can dramatically mitigate the impact. Review these steps to start the process:

Identify critical assets

Assess your technology and tools to identify vulnerabilities. Keep in mind that even a small flood or fire can damage or destroy critical equipment and electronics. Recognizing which items are vulnerable is the first step to securing them to avoid damage or having to replace them if a disaster hits.

Consider what tools you rely on over the course of a week or month to ensure you include items that may not be part of your team's daily routine. A starting point includes:

• Computers
• Servers
• Printers
• Phones
• Point-of-sale equipment
• Inventory
• Machinery

Review your insurance policies

Understand your coverage for the items that are critical to your business, particularly ones you would need to replace quickly. Policies often have restrictions on what they'll replace or cover. The source of the damage — e.g., internal or external, preventable or out of your control — may determine what's covered. Record the make, model, and serial numbers of these items, and keep the records in an offsite location. Also, take pictures of items to help with claim filing.

Protect your company data

Make a habit of backing up important information and files offsite. Doing this consistently will increase the odds of a speedy and successful recovery post-disaster. Cloud-based services make it easy to store and access customer contact lists, insurance policies, invoices, asset records, and other critical documents securely from any internet-connected location. Schedule frequent automatic backups to ensure you lose a minimum of information if disaster strikes.

Take steps to secure important physical records by storing them in fireproof and water-resistant file cabinets or safes. Consider scanning documents as another way to protect them.

Plan for safety

Check that first-aid kits, fire extinguishers, and other emergency supplies are easy to access. Be sure that everyone knows where all the exits are, and consider practicing evacuation routes. Even if the best way out seems straightforward, confusion when lighting is diminished or people are distressed can make such basics less clear. Keep in mind that you or staff may also need to escort customers out during a disaster.

Choose a central meeting place that helps you verify that all staff is accounted for, as well as an alternate spot in case that location is inaccessible. Be sure that you and your employees have one another's cell phone numbers stored; as an added precaution, consider forming a group on a messaging service that can be used to contact team members if phone networks are down.

Prepare for continuity

Determine where employees can work if your building is inaccessible. Depending on the nature of your business, employees may be able to work from home, or you may need to identify a backup facility. If employees will work remotely, be sure they have the tools they need, such as a secure connection to online company resources.

Decide how customers will be notified about changes to your business — for example, through phone calls or posts on your website and social media pages. Determine who will be responsible for this task and others, such as securing fixtures and electronics (e.g., for storms for which there is warning); contacting suppliers; and assessing the premises once an event has passed.

Organize contact information

If technology or files are damaged, employee, vendor, and customer contact information may be hard to access. Prolonged lack of access could bring your business to a standstill post-disaster.

Prepare for this by ensuring that employees assigned to notify customers, vendors, and other important contacts have the phone numbers and email addresses they need. Also, be sure that other key information, such as insurance company contacts and policy numbers, are accessible.

The bottom line

The more thoroughly you prepare for a disaster, the less disruptive it may be to your business, employees, and customers. Re-evaluate your plans over time to be sure they'll continue to cover all critical aspects of your business and operations.