In Light of Japan’s Earthquakes — Here Are 5 Ways You Can Protect Your Business From a Natural Disaster

We hear it all the time, "XYZ country devastated by a natural disaster." Whether on the news, from our loved ones, or on social media, the reality of unexpected disaster is all too apparent. Take this most recent headline: “Japan's deadly earthquakes spark fires and destroy buildings.”

Nobody expects something like this to happen to them — until it does. But all is not doom and gloom! There's a lot you can do to protect your business. In this article, we explore the best disaster preparation methods to ensure your livelihood is safe and secure — let's get to it!

(1) Conduct a region-based risk assessment

If you live in a state known for its earthquakes, then it's wise to be prepared for them! Conduct research on your unique “risk variables.” For example, the risks in a state such as Arizona are different from those in California. 

Once this is done, assess what your business risks are — consider:

• The risk of losing clientele while the phone line/internet is down. Is there a way to send out notices informing them of your troubles?
• Your reliance on daily walk-in clientele (if you operate a brick-and-mortar business). Are you able to help clients online? How can you communicate that they can reach out to you through your website if the physical store isn't available?
• Potential damage to business infrastructure. Will you need insurance? What's likely to be damaged? What protective measures can you put in place?

According to Hardy Desai, founder of Supple Digital: 

"Every hour a business is shut down costs an average of $3,000 to $5,000 in revenue and can negatively impact future revenue." 

So, now that you've identified your risks, let's get into what you can practically do.

(2) Create an emergency response plan

Okay, so this does have a lot of moving parts. But it starts with clearly assessing your business and what could go wrong — ask yourself the following two questions:

(a) What departments will be affected the most?

This is a crucial question. And once you determine it, it's time to get into action. For example, say your business receives regular calls and emails from prospective clients. If a natural disaster makes your office inaccessible, are there ways for employees to work from home?

Or, say, a natural disaster affects your local power grid, and as a result, your marketing team is unable to collaborate on projects that day. Could you supply electricity to your business another way?

Each business situation will be different, but the moral of the story here is to think carefully about what business functions are the most needed and how you can keep them operational.

(b) How can I ensure employee safety during a natural disaster?

And safety doesn't just mean freedom from physical harm! Ensuring that your employees are safe, physically and mentally is paramount. Just ask Robert Kaskel, CPO at Checkr:

"Creating a safety plan in case of a natural disaster should be your first step because teams shouldn't be left scrambling to figure out their next steps - they should know the "drill" well so they can move quickly to keep themselves and the team safe. Once you create a safety plan and educate your team, you must revisit it often. 

The plan may change, and you want to keep that information fresh enough in employees' minds that they can follow through quickly, even under high stress levels. 

Your emergency plan doesn't stop after the disaster is over. Some natural disasters can be traumatic for the people who experience them, so put plenty of mental health and financial support in place to help your team through the aftermath."

In short, make sure that you have:

• A "drill" that employees can follow — i.e., clearly practiced procedures in the case of certain natural disasters. You should also revisit it often with "mock drills."
• Financial aid in case an employee is detrimentally affected.
• Mental health care options for employees who are struggling.

(3) Get affordably insured

Note how I wrote "affordably" there. Don't just hop on the first insurance option — there are a lot of choices! There are also many different kinds. For example, Gillian Dewar, CFO at Crediful, recommends business interruption insurance:

"You must consider whether an interruption to operations will cause financial losses your business won't be able to recover from. If the losses are too great to carry, business interruption insurance can be a great option to give you peace of mind that your business and your team will be protected. 

Interruption insurance covers everything from payroll and overhead expenses to lost income if your business shuts down. Not only does it help keep your business afloat if a natural disaster halts operations - it ensures your employees get paid when they need it most. 

Your industry's risk, commercial property value, revenue, and coverage limits determine business interruption insurance premiums. Since you'll likely pay anywhere from $100 to several thousand annually, so weigh the costs of premiums to ensure they truly outweigh the risks of paying out of pocket."

That’s great advice! And aside from this businesses should consider the following types of insurance:

• Property insurance with natural disaster coverage: Standard property insurance policies may not cover all natural disasters automatically. It's essential to ensure that your policy includes coverage for the types of natural disasters common in your area, such as earthquakes, floods, hurricanes, or wildfires.
• Comprehensive auto insurance: If your business has vehicles, comprehensive auto insurance can cover damage to vehicles caused by natural disasters.
• Specialized disaster coverage insurance: Depending on the location and nature of your business, you might need specialized coverage for risks like mudslides, volcanic eruptions, or other less common natural events.

(4) Get on the cloud

According to Nyokabi Mickens, owner of Loclicious, getting on the cloud is a must:

"Navigating through a natural disaster as a business owner taught me the invaluable lesson of prioritizing digital continuity. My foremost advice is to invest in robust cloud-based backups for all critical business data. This isn't just about safeguarding files; it's about ensuring business operations can continue remotely or from different locations. 

During a disaster, the ability to access client information, financial records, and operational tools remotely can mean the difference between a temporary setback and a catastrophic business halt. This approach helped my hair care business stay afloat when physical access to our premises was impossible."

Cloud-based backups are also:

1. Cost-effective.
2. Scalable according to your business needs.
3. Customizable — they can be set up to intermittently backup your data without the need for human intervention.

(5) Enhance building resilience

While this may end up being your most significant investment, it could undoubtedly be your most valuable. Watch this video and think about how impact-resistant windows can protect your staff and business assets:

Along with installing hurricane-proof doors and windows, you could also have your business externally assessed to determine:

1. Structural integrity.
2. If work needs to be done.
3. What could potentially be upgraded for enhanced safety.

Securing small businesses with a comprehensive disaster preparedness plan

For small businesses, a robust business continuity plan is essential. By integrating key strategies such as region-specific risk assessments, comprehensive emergency plans, suitable insurance coverages, cloud-based data backups, and building resilience enhancements, small businesses can fortify themselves against natural disasters.

This approach is not just about recovery; it's about maintaining continuity, safeguarding livelihoods, and ensuring the enduring success of the small business sector in the face of unforeseen challenges.

Additional resources for securing your business in 2024

• Top Tips for Mastering Your Business Strategy in 2024
• Top Marketing Strategies for 2024 — Insights From 8 Industry Experts
• Best Small Business Growth Strategies for 2024: Insights From 8 Experienced Entrepreneurs