Creating a Business Emergency Plan in 8 Steps
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Natural hazards, such as hurricanes, tornadoes, floods, earthquakes, and pandemics Human-caused hazards, such as acts of violence/terrorism and accidents Technology-related hazards, such as equipment, software, or systems malfunctions
How to Create an Emergency Business Plan
1. Create a Business Emergency Plan Committee
2. Assess Risks and Threats
3. Conduct Impact Analysis
4. Create a Plan Draft
Make sure the plan is comprehensive. Try to think each scenario through so you don’t leave out any important considerations. Create a plan that’s easy to understand. Communication can be difficult during a time of crisis, so keep things simple. Be sure the steps are straightforward. Try to minimize ambiguity and keep it clear exactly what needs to be done in what order. Assign roles. Clarify now who in the company will handle which tasks so that no one is in doubt during a time of crisis. Note important information. This includes where any emergency equipment and/or backup business records will be stored. List (and update) the types of business insurance you have that are relevant to the emergency. Make sure to include contact information for the insurance companies and policy numbers.
5. Test the Plan
6. Make Improvements
7. Distribute the Plan and Train Your Team
8. Plans for Emergency Funding
Types of Emergency Funding
SBA Economic Injury Disaster Loans. The Small Business Administration (SBA) offers Economic Injury Disaster Loans (EIDL) with the aim of helping small businesses with financial challenges resulting from a disaster. These loans offer low interest rates and loan terms up to 30 years. On the negative side, the application process may be lengthy and there are restrictions on what you can use the loan for. Business Line of Credit. If you want to be prepared for an emergency that may or may not happen, you might want to consider a business line of credit. Much like a credit card, a line of credit makes a certain amount of funding available for you to draw on at will. If you don’t draw on it, you won’t need to pay it back. If you do draw some out, you’ll be charged interest only on that amount.
Alternatives to Emergency Loans
More flexibility in the amount that can be borrowed, the loan term, and the qualifications required. Less paperwork and faster processing times. Easier to compare online loans, thanks to web-based comparison tools. Borrowers with high risk levels may be able to qualify more easily with online lenders. Online loans may be more expensive in terms of interest. There’s usually limited in-person interaction involved in an online loan. Some online lenders may not be well-established yet.
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