As the news about Hurricane Sandy’s devastation in the Northeast continues to unfold, a cautionary tale is emerging, one that should hit home with business opportunity, franchise and other small business owners in particular. The reason? Most of them could just as easily be in the same predicament.

It’s estimated that 40% to as much as 60% of small businesses will never reopen their doors following a disaster. Why? It’s simple really. They are woefully underprepared. In fact, security and auditing solutions estimates that nearly 90 percent of small and medium-sized businesses (SMB) have inadequate or outdated disaster recovery plans, and nearly 40% of them report that the extent of the plan they do have goes no further than backing up data.

While there’s no question that data security is a crucial issue for SMBs today, it’s just one of a number of very important elements that need to be anticipated and addressed as part of the overall disaster planning, preparedness and recovery process. Other questions that need to be asked and answered if SMB owners want to increase the likelihood of their survival in the wake of a disaster include:

• What kind of insurance do I need? Far too many business owners in Sandy’s path did not have adequate insurance. Standard business protection is oftentimes not enough. It does not cover losses related to flooding or business interruption, so SMBs need to know what other options they have and plan accordingly.
• What steps can I take to mitigate physical damages to my business? Protecting your business’ inventory, machinery or other physical assets from ruin may be as simple as moving them to off-site storage or even to higher ground. One Sandy-affected business owner reports he lost irreplaceable original artwork that was hanging on the walls of his restaurant. Saving it would have been a simple matter of removing it and putting it in his home. Sounds easy in 20/20 hindsight, but when you’re in a panic is not the time to remember the details. That’s what an advance plan of attack is all about.
• How will I keep my doors open if my business survives, but so much else around us is affected? Many SMBs are struggling after Sandy not so much because they have been devastated, but because they are challenged by extenuating circumstances—their employees can’t get to work, the power is out, gas is short, public transportation is spotty and shipping has stopped. These are all temporary obstacles that can be overcome to some degree, but doing so requires serious contingency planning in advance.
• What if our suppliers are unable to get us the products we need? Lack of product is more than just an inconvenience. It actually can translate into a serious cash-flow problem pretty quickly, one that can be as devastating as actual physical damage. SMBs need to be ready with a plan for how to manage the expectations of their customers in the interim as well as how to bridge the financial gap that might come as a result.
• Is my business ready and able to handle any disaster or challenge? While hurricanes are certainly becoming more severe if not more prevalent, they are just one of many so-called disasters that can befall SMBs anytime anywhere. What about a serious flu epidemic? Wide-spread power outages? Drought? What will you as a SMB owner do then? Do you know? Have you even thought much about it?

While you may want to believe that the likelihood of a monstrous natural disaster striking your SMB is unlikely, the fact is that everyday challenges, like being hacked by a cyber-thief, are becoming more commonplace than ever. Smart home-based business opportunity and other business owners know this and are taking a lesson from Katrina, Irene and Sandy. They need to be ready, and getting ready is not hard so much as it takes effort.

A good place to start…

Hosted in concert with business recovery consulting company Agility Recovery, the U.S. Small Business Administration is sponsoring a free webinar next week on November 13 from 2 p.m. to 3 p.m. EST on how to prepare your business for winter disaster survival in particular. It is just one in an ongoing series of activities designed to ensure SMB owners have the proper education, planning, testing and disaster assistance they need in order to face the challenges of an ever-changing world.

To learn more about the many other FREE disaster planning and survival tools and resources available to you as a SMB owner, go to www.PrepareMyBusiness.org now!