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Disaster Recovery: Is your business prepared for a disaster?

disaster recoveryMany businesses are not prepared to deal with a major catastrophe. Without the same vast resources that are available to larger corporations, many businesses often face limited options after a disaster. Sadly, closing the doors is all too often the only choice available, especially when the business has little or no disaster recovery plans in place.

According to a recent study by the NFIB, around a third of all businesses will face some form of disaster or another during their operation. Whether it’s something as massive as a hurricane or as commonplace as an electrical storm, disasters can put the brakes on a small business.

A study the U.S. Department of Labor offers even more sobering statistics. Over 40% of businesses that experience these kinds of disasters never reopen. Another 25% will close within two years.

There are a number of important factors you need to take into account when it comes to disaster recovery:

•    Disaster Preparedness: Businesses who have taken the time to establish a business continuity or disaster recovery plan will be better prepared to rebuild than a business that was ill-prepared. If your business wasn't ready for the disaster, all is not lost. Documents and important business data can be restored in time by working with your accounting department, the tax department, and any other public records department.

•    Damage Assessment: Before you can decide what to do with your company, you need to figure out exactly how bad it all is. Look at the costs of the damages and what it will take to rebuild. Estimate the replacement or market value costs to replace damaged aspects of your business operation. Disaster recovery will be more challenging for small businesses with large inventory losses. Contact your insurance agent to calculate what and how much will be covered.

You need to get a picture of how much you will have to reinvest in the business as well as factoring in the interruption to cash flow. Determine what you'll receive for business interruption insurance from your agent.

•    Market Reach: After a disaster, the market will take time to reestablish itself. With no need for certain goods and services for some time, you must consider what alternatives exist. International, national, and regional business will have a much easier time rebuilding following a major disaster than local businesses. Businesses reliant on heavy foot traffic will have greater challenges in rebuilding. Can your business reach out to new markets unaffected by the disaster or provide goods or services to help in disaster recovery for the community?

•    Customer Spending: Rebuilding efforts following a disaster can be an economic gain for certain businesses participating in the rebuilding. Certain industries and sectors will have an easier time gaining new business. Essential businesses in a disaster zone such as grocery, medical, and construction will be in high demand. If customers are greatly impacted by the disaster, they may have very little need or money for your service or product. Think of how the disaster will affect your customers spending habits.

•    Financial Position: Vital to any critical decision making to reopen your business is determining your financial position. What is your current financial picture? What amount of money will you need to make your business operational? Are you eligible for SBA disaster loans and other forms of assistance? If you have insurance; what will be covered and how much? These questions must be answered before moving forward. Disaster recovery will be more difficult for businesses experiencing financial difficulty prior to the disaster.

•    Network Communication: To make the best decision to move your business forward, you must have a grasp of how the disaster has impacted those connected to your business. Call suppliers, employees, and customers to inform them of your situation. Many will offer support or alternatives for you to consider. Manufacturers might be able to ship directly to your customers or suppliers can assist in payment schedules. Knowing these options exist for your business can help in making the final decision.

Learn more about Unitiv's Disaster Recovery planning services. 

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Unitiv, Inc., is a professional provider of enterprise IT solutions. Unitiv delivers its services from its headquarters in Alpharetta, Georgia, USA, and its regional office in Iselin, New Jersey, USA. Unitiv provides a strategic approach to its service delivery, focusing on three core components: People, Products, and Processes. The People to advise and support customers. The Products to design and build solutions. The Processes to govern and manage post-implementation operations.