Small Businesses Need Disaster Recovery Plans

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NEW YORK (TheStreet) - Whether it's a tornado, a hurricane or the toilet exploding, small businesses should always have disaster recovery plans in place.

Natural disasters are here to stay and last week's devastating tornado that ripped through Moore, Okla. killing two dozen people and injuring hundreds, is a prime example that U.S. weather patterns are becoming increasingly chaotic. Small business owners should be prepared for events they can't control.

June 1 marks the start of hurricane season, and while many parts of the New York and New Jersey coastal communities are still rebuilding from Superstorm Sandy, one of the worst hurricane's in U.S. history, The National Oceanic and Atmospheric Administration (NOAA) forecasts a higher than average 2013 Atlantic hurricane season.

The forecast calls for 13 to 20 named storms, seven to 11 of which are expected to become hurricanes, of which three to six are expected to become major hurricanes (which have Category 3 or higher winds). For the 17-year period through 2012, hurricane season averaged 15 named storms, eight hurricanes and four major hurricanes.

Also see: Rebuilding After Sandy's Wrath

The Federal Emergency Management Agency (FEMA) estimates 40% of businesses do not reopen after a disaster, and of those that do reopen, 25% fail within one year.

A December 2012 survey by Alibaba, Vendio and Auctiva polled 600 small-business owners to gauge how prepared they were to run their business if a natural disaster struck. The findings were alarming: 74% of American small businesses do not have adisaster preparedness plan; 84% of them are without natural disaster insurance.

Bob Boyd, President and CEO of Agility Recovery, a former division of General Electric and a provider of business continuity and disaster recovery solutions to small and mid-sized businesses, spoke with TheStreet to offer small-business owners advice on preparing for uncontrollable events.

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How important is it to have a disaster recovery plan at a small business?

Boyd: I can't stress enough how critical it is for an organization. Big companies they have to have these plans. Most small businesses don't they don't know what the options are, they don't know how to get started. I think a lot of businesses think it's going to be expensive or difficult or time consuming to put a plan together that can be relevant for something bad, like a tornado hitting or a toilet rupturing. A plan gives you a strategy about what you're going to do about it.