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BusinessMarketing

Prepare for (and Prevent) Business Disasters

Learn how natural disasters and infectious disease outbreaks can disrupt your business and what you can do to prepare and mitigate future risk.
Photo Credit: ATA

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Author: Cassie Gasaway

How prepared was your business for the impacts of COVID-19?

National health emergencies, such as the pandemic, and other disasters can devastate businesses. Lynda LeCompte, owner of X10 Archery & Academy in Houston, saw many retailers go under because of COVID and hopes remaining businesses take that as a sign to prepare for other potential setbacks.

“(Disasters and risks) are part of being in business,” LeCompte said. “Having an idea of what risks you may face and being prepared for them can save your backside. It’s really not possible to prevent some disasters, but there are many things that we can do to mitigate risk and be better prepared.”

Consult with an advisor on how to prepare for a disaster. Photo Credit: ATA

Jay Thompson is a partner at the full-service law firm Nelson Mullins. The company is also a MyATA service provider focused on advising businesses of all shapes and sizes on product recalls, product safety regulations, intellectual property, California Prop 65 and risk prevention. Thompson said ATA members should work disaster preparedness into their business model to have protections and security measures in place, should disaster strike.

Being prepared and knowing how you’ll respond to a crisis reduces stress and frustration, prevents rash decision making and increases your odds of pushing through adversity.

Let’s discuss the most common types of disasters, how businesses can prepare and what they can do to potentially prevent certain disasters from happening.

 

Types of Disasters

According to Thompson, ATA members should think about three different types of disasters:

1. Disasters that affect all businesses in an area. Think of big picture disturbances like power outages, and most natural disasters, including earthquakes, floods, hurricanes, wildfires and tornadoes.

2. Disasters that only affect your industry. For example, the archery industry is susceptible to supply chain issues, animal rights issues and participation declines.

3. Disasters that only affect your business. Localized disasters are most common, and the list is exhaustive. Think thefts, fire, accidents, acts of violence, equipment failures, employee illnesses, financial mistakes, cybersecurity attacks or things that can negatively affect your brand’s reputation, like mistreating employees or having lousy customer service.

“All those things are very real things that most of us have either dealt with or heard of someone else who has,” Thompson said. “When you’re in the business we’re in, I can tell you with great confidence that every business will deal with a disaster of some capacity. Disasters are unpredictable, but with proper preparation, you can prevent or lessen the impact of these things.”

LeCompte has encountered multiple business disruptions, including theft, loss of staff, personnel issues, issues with neighboring businesses, air conditioning outages and COVID problems. X10 Archery & Academy is also susceptible to hurricanes. LeCompte said the list goes on, but she’s thought about how to react in different circumstances. That forethought and preparedness has helped her face disasters head-on. It’s also given her peace of mind knowing she’s doing her best to keep her business alive to help the community with essential needs.

Keep your customers informed of any changes brought about by a disaster and thank them for their support. Photo Credit: X10 Archery

Preparing for Disasters

Specific details of how to prepare for a disaster change based on the type of disaster, but the high-level principles of all disasters remain the same. A disaster is something that happens outside your area of expertise. Most ATA members eat, sleep and breathe all things archery and bowhunting. If that’s you, that also means you’re probably not familiar with disasters because you don’t deal with them daily. Therefore, Thompson said the first way to prepare for a disaster is to work with someone in the business of disaster prevention and preparedness.

“You need (to find) good advisers who are reliable, trustworthy and in the business of disaster prevention,” Thompson said. “They can provide the counseling you need before the problem occurs and explain how to respond if the problem occurs. It’s essential to have that relationship.”

That specialist might be your banker, lawyer, financial adviser, insurance provider, real estate broker or whoever is knowledgeable about overcoming the disaster you foresee.

Secondly, determine how you want to balance risks versus rewards in your business model. Will you pay for extra layers of insurance to cut down your risks if something were to happen, or will you pocket the money and be rewarded if nothing happens? Managing a business is full of decisions, and each decision you make has benefits and consequences. Each business owner must decide how they want to manage and mitigate risk and which type of risk they’re willing to endure. Outline your decisions and post-disaster response in your business plan.

 

Preventing Minor Setbacks

Although disasters that affect your industry or community are hard to prevent, tragedies that affect your business are often preventable. For example, you can install security cameras or rearrange your shop layout to prevent thefts, hire a range supervisor who ensures everyone is following safety rules to avoid accidents, and cross-train employees in the event someone gets sick or stops showing up for work. You can also have an accountant check your books, ask customers to take a survey regarding customer satisfaction, or conduct performance reviews to see if employees feel they’re being treated fairly. Taking proactive steps regarding your company’s finances and reputation will help you identify issues before they put your business in jeopardy.

While you’re at it, it’s a good idea to check your insurance policies and certifications to ensure they’re complete and up to date. Thompson also advises ATA members to share their business preparedness plans and response protocols with employees, so everyone knows what to do and how to react.

 

Take Action

Don’t delay. Disasters are unpredictable and can happen to anyone. Create a disaster preparedness plan ASAP. Visit the MyATA service provider webpage to find advisers who can help. Also, read ATA’s article “Is Your Business Prepared for Emergencies?” to learn how to prepare for the unexpected.

The Small Business Association website also has tips and information on emergency preparedness and disaster preparedness.

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