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Business & Economics

Opinion: What the pandemic taught us about crisis preparedness


The pandemic has shown South Dakotans the importance small businesses play in both our local and national economies. In early 2020, as COVID-19 began spreading across the U.S., small businesses and entrepreneurs were forced to quickly flex their business models, pivoting to new marketing and sales techniques to continue to get products and services to the local, national, and global market space. During National Small Business Week, September 13-15, the U.S. Small Business Administration highlights the resilience of America’s entrepreneurs and the renewal of the small business economy as we collectively build back better from the economic crisis brought on by the pandemic.

While overcoming the pandemic continues to be front and center in moving our economy forward, our nation remains vulnerable to a variety of natural disasters including wildfires, hurricanes, tornadoes, blizzards, and drought. Historically, up to 25 percent of businesses that close because of disaster never reopen. The SBA encourages South Dakota businesses to create or update a workable crisis preparedness plan taking into consideration lessons learned from COVID-19 and other natural disasters. The following business strategies help owners prepare for a time of disaster:

"Historically, up to 25 percent of businesses that close because of disaster never reopen."

1. Evaluate your exposure. Know your community and the types of disasters most likely to impact your business. Consider your facility’s proximity to flood plains, wildfire areas, rivers and streams, and other hazards. Include the COVID-19 pandemic as the first exposure issue on the list.

2. Review your insurance coverage. Consult your insurance agent to determine best coverage. Specifically, ask about eligible coverage during a pandemic. Check into business interruption insurance to help cover operating expenses if temporary closure occurs. You may also need separate flood insurance.

3. Review and prepare your supply chain. At the start of the pandemic, many food suppliers temporarily ceased operations and were not able to fulfill client orders. It is important for small businesses to establish business relationships with alternate vendors in case primary suppliers become unavailable. Place occasional orders with alternate vendors to be regarded as an active customer. Create a contact list for important business contractors and vendors you plan to use in an emergency. Keep this list at an offsite location.

Create a crisis communications plan. At the beginning of the pandemic, many business owners did not have current contact information for their employees and vendors. Establish an email and social media alert system, keeping primary and secondary email addresses for your employees, vendors, and customers. Provide real-time updates to your customers/clients and the community so they know you’re still in business – or, potentially in the process of reestablishing business – following a crisis.

5. Establish a written chain of command. Let your employees know the emergency chain of command should your business close. Maintain a clear leave- and sick-day policy during disasters. Establish a backup payroll service should your office be destroyed.

6 Create/implement a Business Continuity Plan. This plan should state when it will be activated; identify essential business functions, and staff to carry out these functions; determine which employees are considered non-essential vs. essential, and identify records and documents that must be secured and readily accessible to perform key functions. Be prepared to implement the Business Continuity Plan remotely should disaster strike.

Developing an effective and workable crisis recovery plan is critical for all small business owners and may make the difference in continuing operations or closing doors forever following a disaster. For more information on crisis planning, and SBA’s ongoing COVID 19 relief programs, please visit www.sba.gov/disaster.