Lessons from Ike

Posted by: Amy Barrett on September 15, 2008

As if small businesses needed a reminder, the devastation of Hurricane Ike was fresh evidence that even a moderate hurricane can cause widespread damage. So the question is: How ready are America’s small businesses for such disasters?

The answer, unfortunately, is not very ready. According to the Institute for Business and Home Safety, 25% of businesses do not reopen following a major disaster. And according to some surveys, more than 70% of small businesses don’t even have a disaster plan in place.

The fact is these things don’t have to be overly complicated. The Small Business Administration and Department of Homeland Security, among others, have information on their websites on how to set up a disaster plan with common sense tips. These stem from assigning one person to be responsible for monitoring weather alerts if you are in a tornado-prone area to having a plan for contacting employees before and after an event.

Certainly small business owners have plenty to do simply putting out the every day business fires in their operations. But failure to prepare for those unexpected but devastating natural events can prove fatal.

Reader Comments

Bob Layton

September 16, 2008 4:43 PM

This article "Lessons from Ike," did not include any lessons from Hurricane Ike, just Amy Barrett's opening statement that "the devastation of Hurricane Ike was fresh evidence that even a moderate hurricane can cause widespread damage." How about listing some specific lessons learned from Ike, which is what I was looking for when I clicked on this article title.

Harry Phillips

September 17, 2008 7:49 PM

Business owners large and small have five methods of securing their financial well being as a company.(Company being defined as Sole Proprietor, Corporation, LLC.

These five things are: 1. Avoidance of the risk. 2. Controlling the risk. 3. Non-insurance risk transfer. 4. Risk retention. 5. Insure the risk.

That's it folks. Its that simple. those are your options.

Avoidance means that the risk to the Company has been eliminated. i.e. if you want to eliminate the risks associated with sky diving you do not sky dive.

Controlling the risk. You do not build a house in a known flood plain.

Non-insurance transfer. By contract the risk is transferred to someone else. i.e. The landlord requires the tenant to carry the coverage for the destruction of the landlords building.

Retain the risk. No matter what happens the company will pay for all losses and not complain.

Insure the Company. Meet with a qualified Insurance Agent/Broker and define what the Company wants covered and what they perceive their needs are. Then listen to what the agent/broker recommends. They will not get rich off one Company. They will probably recommend coverage that prevents the company never opening again.

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What's it like to run your own company today? Entrepreneurs face multiple hurdles new and old, from raising capital and managing employees to keeping up with technology and competing in a global marketplace. In this blog, the Small Business channel's John Tozzi and Nick Leiber discuss the news, trends, and ideas that matter to small business owners. Follow them on Twitter @newentrepreneur.

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