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Can your business survive? Top Ten Tips: Ensure your Business Survives Natural Disasters

In the USA disasters force up to 40% of small businesses to cease trading. Can your business survive?… Get the top ten essential preparedness tips here.


Each year it feels like the UK braces for it’s worst storm in years. In the US hurricanes have repeatedly savaged coastlines and wrecked communities. and the profound consequences of superstorms continue to affect the people and businesses left in their wake.

According to FEMA (U.S. Federal Emergency Management Agency) disasters force up to 40% of small businesses to cease trading, permanently. Smaller companies comprised of 50 employees or less, face a great impact, compared to larger companies with multiple trading sites. Those areas facing existing tough economic trading conditions fare the worst, where the trading conditions were challenging to begin with.

Many businesses take an incredibly long time to reopened. Then there are the additional pressures from increased insurance costs, the decline in tourist numbers and damage to local infrastructure. Many business owners, faced with the additional costs of essentially restarting their business from scratch,  simply give up.

The SRA (U.S. Small Business Administration) calculate that of the estimated   60,000 to 100,000 small businesses that were negatively impacted by hurricanes 30 percent failed as a direct result of the storm.

With the inherent risk from such events, how can you protect your business? The answer in one word is preparedness. The more prepared you are, the more likely your business is to survive. The Business Docs top ten essential preparedness tips will help you prepare for the unexpected:

  1.  Check your insurance cover.  This is a bit of a no-brainer but how many of us actually read insurance documents? Thoroughly check that you have all the cover you need, that the policies are in force and there are no hidden policy conditions, which might cause problems if you need to make a claim. Arrange a meeting with your broker to ensure your insurance meets your needs as a business.
  2.  Think beyond natural disaster. We often imagine a disaster to be a hurricane or earthquake. However, a comprehensive threat assessment should include other potential threats, including drought, burglary, power outages, terrorism, cyber attack, or any other events which pose a substantial threat to your business.
  3. Have a comprehensive BCP (Business Continuity Plan). A comprehensive BCP is essential in ensuring that your business can be reinstated as soon as possible following an event. Working out what to do before an event occurs, ensures that you maintain control of your business.
  4. Make sure employees know what to and stay safe. As a business owner, if a disaster occurs your first priority is to ensure the safety of your customers and employees. If employees know what to do and how to handle the situation, they can take effective control and ensure the safety of all involved.
  5. Carry a copy of your business continuity plan with you. A disaster can happen at any time, ensure that you have access to your plan at all times by keeping it with you.
  6. Keep the contact details for your employees up to date. Staying in contact with your employees in a business continuity event is crucial. Ensure that you have the current contact details for all your employees. Check with all your employees once a month to ensure their details is current.
  7. Have an alternate site or recovery work area for your business. Many businesses are reliant upon a single site that their business operates from. If that site is destroyed or rendered inoperative, consider how your business would survive. Alternate sites or recovery work areas can be rented for your business to move into immediately if your usual site cannot be used.
  8. Have a strategy. Having a plan is additional work and expense that you might never need. However, if the worst were to happen, you would be thankful you planned ahead.
  9. Stay in contact and have your business equipment available. If a disaster were to occur, the last thing you need to have happen is not to have essential business equipment with you. Keep your company cell phone, laptop, tablets, tool kits, medical kits and anything else that you might need with you. Ensure employees do the same, so you can stay in communication with them and they have the essential equipment at hand.
  10. Inform your customers. In all of this, don’t forget your customers. Informing your customers that you have comprehensive continuity plans, displays due diligence and commitment towards them. If a business continuity event occurs, contact your customers and keep them reassured.

We can help you!

  1. Disaster Recovery Plan Template
  2. Business Continuity Plan
  3. RAID Log
  4. Project Dashboard
  5. Roll-out Plan
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How to Score Risk Simply – the Risk Matrix

There are many ways to measure and communicate risk – this is just one that we have found useful, and easy to communicate.

The 25 cell “Impact vs Likelihood” Risk Matrix is a popular format used to communicate Risk Scores. It helps you summarise your risks for project reporting.

The Risk Score Heatmap Matrix

This 5 x 5 (25 cell) matrix gives an easy way to associate a “Severity Score” with a Risk. NB you will see a lot of variations on this – so this is just one approach of many that Project Managers can take.

Risk Matrix used in the RAID Log
Risk Matrix used in the RAID Log

Each cell in the matrix is a combination of impact and likelihood.

This allows you to group your risks, based on a score, into some Risk Severity groups:

Risk severity scoring
Risk severity scoring

This Risk Scoring approach is used in our RAID LOG template.

An approach to assigning Impact and Likelihood scores

Project Managers use a list of score definitions, to help one another assign and understand the scores for each risk.

Here is an example approach:

Score Title Likelihood % Chance
1 Rare Rare. A very unlikely event. It could happen, but probably never will. Below 5%
2 Unlikely Not expected. Slight possibility.
An improbable sequence of events.
5% – 25%
3 Possible Moderate likelihood. Foreseeable. May have occurred in projects like this before. 25% – 50%
4 Likely Strong possibility. High likelihood.
An easily foreseeable event.
50% – 75%
5 Almost Certain Very likely.
Almost certain without any intervention.
Above 75%
Score Title Outcome / Impact / Consequence Cost / Time / Scope
1 Insignificant The project will have to make some minor changes to scope. Resolvable by management team. Can be managed. Acceptible.
2 Minor Some changes to deliverables.
Outside of Project Tollerances or Contingency.
Adjustment to scope with some impact.
3 Moderate One or more areas likely not to deliver as planned. Descoping required. Significant impact.
4 High Significant descoping required. Major Impact.
5 Extreme Serious failure of project objectives. Disastrous Impact.

Example Guidance for Project Managers according to Risk Severity

Extreme Escalate immediately to project authorities.
Include recommendations.
Actively control.
High Manage immediately.
Inform project authorities.
Act on mitigation and ensure you have response plans ready.
Moderate Manage risk and escalate in normal reporting.
Watch carefully for change in exposure.
Low Manage risk.

Problems with Scoring Risks with a Matrix

There are many ways to allocate weighting to risks, and to group severity, with no right or wrong answer. The allocation of severity groupings helps you give summaries to your colleagues, but the groupings you choose will need to vary depending on the project type, size and environment.

See more here on Wikipedia about the problems with Risk Matrices.

Project Managers manage their Risks in a “RAID Log”.

RAID Logs are used by project managers and programme managers to track and manage project risks.

Many projects have 10s and sometimes 100s of Risks to manage, and so it is essential to keep track of severity, status, next steps, and who owns each risk.

RAID is an acronym that stands for

  1. Risks
  2. Assumptions
  3. Issues
  4. Dependencies