Catastrophic Disasters – 90% chance your business won’t recover

By Mark Hamon, Risk Management Training and Safety Consultant Sydney. The U.N. Office for Disaster Risk Reduction warned that economic losses from floods, earthquakes and drought will continue to escalate unless businesses take action to reduce their exposure to disaster risks. The cost the economy since 2000 has been $2.5 trillion. Reference: . Do you have a Business Continuity Management (BCM) and Emergency Plan that is benchmarked to global standards?  Listed is 5 questions you need to seriously ask yourself if you want your business to survive. If you answer NO to any of these questions then you are at risk:
  1. Does your business have a disaster recovery plan in place to help deal with the insurance process after the event has occurred?
  2. Do you have a plan of action for the recovery of your business including the clean-up?
  3. Do you have alternative plans for managing employees and making sure you provide a safe working environment in the post disaster recovery?
  4. Have you considered the impact on your business from damaged stock, damaged plant/machinery, unsafe building condition and disruption to customer sales?
  5. Do you have a check lists for dealing with the different types of natural disasters e.g. bushfires, floods, storms?
Now consider this: 40% of businesses don’t reopen after a disaster and another 25% fail within one year according to the Federal Emergency Management Agency (FEMA). Similar statistics from the United States Small Business Administration indicate that more than 90% of businesses fail within two years after being struck by a disaster. Reference: The statistics are quite sobering with up to a 90% of businesses failing within 2 years of disaster, so consider the following if you want to survive:
  • Business continuity plans, emergency evacuation plans and emergency phone contacts Protective document holder for insurance policies, finance and banking records.
  • Back up portable database storage for electronic business files and records e.g. USB sticks.
  • MSDS folders, materials and equipment records.
  • Warehousing stock or products listing and including details.
  • Employee contact details.
  • First aid kit and safety items like small radio, PPE, mobile phone, camera etc.
  • Physical security items e.g. spare keys, code pin numbers.
Insurance companies and emergency services will be in high demand and waiting times may be long. What proactive plans do you have in place so you can help your business recover? Remember it’s not a matter of IF, but WHEN. If you have any questions about BCM or natural disaster planning for your business, then contact KONA Group’s Risk Management Training and Safety Consultant Sydney Specialist.  Mark Hamon can be contacted at or call 1300 611 288