The Most Dangerous Thing a Small Business Can Say “No” To

There is an 80% chance you will be struck by a disaster or a major interruption at some point during your company’s lifetime. That is a sobering reality, especially since statistics show that small businesses without a disaster plan are playing a dangerous game.

It doesn’t matter if it is a brick and mortar business or an online company with a single owner and no employees. If you are interrupted by a disaster, and are not back in business within a month, your chances of survival are less than 1 in 10.

Unfortunately, I see this a lot in the disaster business.  Small businesses who still think they can just wing it and get through a major disruption. Why would you do that when every single Fortune 500 company has a robust disaster program? Not a single one of those companies would wing it. The reason is because they recognize that a disaster program is the company’s chance to make money, and not lose valuable customer relationships. 



So do you still need a disaster plan? Yes you do, for one reason: you have the most to lose.

When Wal-Mart has a store closed for a couple of days, it loses ten to twenty thousand dollars. For them, that’s nothing. They can easily make that back in just a few days, especially since their marketing position is such that they have broad appeal almost anywhere they are situated, and they know it.

Want to know a secret? 

Wal-Mart probably has the best disaster and business continuity plan of any brick and mortar company in the world.

They don’t care if they can make lost money back. They want to be open to show their customers, the community, and their competitors that they mean business. Wal-Mart won’t give an inch away that it doesn’t have to, because they take disasters seriously. Companies without disaster plans that do survive needlessly spend a lot of money to do so. 

I spoke a couple years in a row at a state restaurant association in an area known for massive disasters. After one of my presentations, a guy came up to me and told me that he was recommending to the association that they no longer have disaster management educational sessions.

When I asked why, he said it was because his restaurant had been struck by a disaster twice and he had survived both times without a disaster plan. After asking a few more questions, he said had spent about $18,000 on each one to completely return to normal.

I absolutely couldn’t believe it. There is no rhyme or reason why a small business restaurant should spend nearly $40,000 to be continuous after a couple disasters. What he doesn’t realize (or refuses to) is those losses will eventually catch back up to him.

Do you have $40,000 to spend on a disaster response? Do you want to spend that on a disaster response? Or would you rather have that to renovate your store, or buy more advertising time or invest in your employees?

What he also doesn’t realize is a disaster can cost you more than just money spent on responding. There are a host of intangibles that can’t really be quantified by money, such as public relations, brand perception, loss of future customers, and even the loss of qualified employees. I knew companies that lost great managers to other businesses because they weren’t open in time, while their competitors were ready to take their valuable skills.

The original company couldn’t pay them during the 8 weeks they were closed, and the employees still had bills to pay and mouths to feed. That compounds the problem because now your competitors have an edge on you, and you now have to either: hire and train new employees or make significant sacrifice to get the ones you lost back.


A good disaster program will make sure that you have a disaster plan that is tailored to your business, with training of your employees and periodic exercising of the program with realistic scenarios.

Your small business has the most to lose, so do what your Fortune 500 counterparts do: get a disaster program. It's not worth saying "No" to.



Patrick Hardy LL.M, CEM, ALEM, LEM-Pro