Prepare for the Worst, Plan for the Best: Disaster Preparedness and Recovery for Small Businesses

Chapter 1. Yes, You Should Sweat the Small Stuff!

Disasters occur more frequently than we realize. Research consistently shows that for small businesses, the effects of a disaster can be devastating:

• More than one in four businesses will experience a significant crisis in any year.^[4]

• Of those businesses that experience a disaster and have no emergency plan, 43% never reopen.^[5]

• Of those that reopen, only 29% are operating two years later.^[6]

The losses that these figures represent do not appear to have motivated preparedness efforts by small businesses: A recent survey of 2,500 small business owners found that 71% did not have a disaster preparedness plan in place. Nearly two-thirds of them stated that they do not need one. 63% expressed confidence that they would resume business within 72 hours if they were affected by a natural disaster, even though historical experience shows that this is absolutely not the case.^[7]

Disasters are, for the most part, manageable. We cannot prevent disasters from occurring, but we can equip small business owners with the knowledge that they will need to mitigate their risks and to recover quickly when disasters do strike. That is the goal of this book.

As small business owners, our resources are limited and we must work our assets smarter, not harder, than the assets of larger companies. We must spend our insurance premium dollars wisely and make cost-effective decisions on establishing backup information technology (IT) support. In the first edition ...