8 simple steps for creating an emergency business plan


Written by:

According to the United States Department of Homeland Security, businesses face three general types of hazards:

  • Natural hazards, such as hurricanes, tornadoes, floods, earthquakes, and pandemics
  • Human-caused hazards, such as acts of violence/terrorism and accidents
  • Technology-related hazards, such as equipment, software, or systems malfunctions

Emergency plans for businesses should contain proactive measures to protect small businesses against these hazards and to help them recover if one of the hazards occurs.

Planning ahead can help to protect the lives of employees. In addition, many companies get back into operation more quickly after a disaster through emergency preparedness planning. Plus, if a business plans to seek small business funding, many lenders will want to see business disaster plans before loaning out money.

Image Credit: mapodile/istockphoto.

How to Create an Emergency Business Plan

Because no two businesses are alike, no two business disaster plans will be, either. Typically, though, the following steps can help guide most companies through the creation of their plan. 

1. Create a Business Emergency Plan Committee

Work days can be busy — so it can be all too easy to put this type of planning off for another day. It makes sense to consider creating a committee that’s tasked with creating a plan and given a deadline for its completion. 

Pick committee members strategically, aiming for a mix of types of expertise. For example, you might want to include someone who’s familiar with your office security and someone with experience in IT so that you’ll have multiple types of disaster covered.

Then decide how to create the business emergency plan in an organized, logical way. For example, if the first focus would be on natural disasters, committee members could decide to establish an off-premise meeting place for employees, list phone numbers of first responders, describe how temporary equipment can be secured post-emergency, and so forth.

(Learn more at Personal Loan Calculator

Image Credit: JLco – Julia Amaral/istockphoto.

2. Assess Risks and Threats

Committee members will want to prioritize the threats that seem most likely when they’re making the business emergency preparedness plan. 

For example, if a business is in a geographical area where hurricanes are a threat, planning for that eventuality should be a priority. For another business, tornadoes may be the bigger threat. 

Go beyond considering only the most immediate threats, though, and create plans for scenarios that may seem less likely, such as an active shooter scenario or a major cyber attack. The good news is that no business needs to reinvent the wheel when it comes to creating plans for immediate responses after a disaster. The federal government has info sheets and preparedness plans for a wide range of disaster-related scenarios. 

Image Credit: filadendron/istockphoto.

3. Conduct Impact Analysis

After determining the immediate actions to take after a natural or human-driven disaster, consider the potential business impact of each scenario. 

These effects can include lost income if the company needs to close for a period of time and/or disrupted supply chains that could affect the company’s ability to fulfill orders. 

Also consider disaster recovery costs, such as new equipment purchases, and what it will take to reassure customers and suppliers that your company will be back on track and doing business again soon. Think about if any new initiatives need to be put on hold while disaster recovery steps are taking place.

Image Credit: jacoblund/istockphoto.

4. Create a Plan Draft

Writing a business emergency preparedness plan may feel similar to writing a business plan, as you may have done when the company was created, but with a more targeted focus. 

To create an emergency business plan:

  • Make sure the plan is comprehensive. Try to think each scenario through so you don’t leave out any important considerations.
  • Create a plan that’s easy to understand. Communication can be difficult during a time of crisis, so keep things simple.
  • Be sure the steps are straightforward. Try to minimize ambiguity and keep it clear exactly what needs to be done in what order.
  • Assign roles. Clarify now who in the company will handle which tasks so that no one is in doubt during a time of crisis.
  • Note important information. This includes where any emergency equipment and/or backup business records will be stored.
  • List (and update) the types of business insurance you have that are relevant to the emergency. Make sure to include contact information for the insurance companies and policy numbers. 

It’s also a good idea to consult with a lawyer and/or experts like your local police or fire department to make sure your plan is following the law and any recommended procedures. Here is another example of an emergency preparedness plan to guide your business in this stage of the process, and you may want to consider this list of related resources from the U.S. Chamber of Commerce Foundation. 

Image Credit: Martin Barraud/istockphoto.

5. Test the Plan

Ready.gov notes numerous benefits to testing and training. These practices clarify roles and responsibilities for company staff members and helps them learn what’s expected of them if an emergency takes place. 

Testing and training also reinforces the procedures listed in the company’s plan and gives team members a chance to identify and fix any gaps or weaknesses before an actual emergency occurs.  

During the testing, a business may realize that alarms should be louder, for example. Or it could recognize that the planned meeting spot may not be adequate in a large-scale emergency. Addressing these gaps ahead of time will help to foolproof the plan.

The company can use these rehearsals as a reminder to ensure that the plan complies with local laws and codes, as well.

Image Credit: Ignatiev/istockphoto.

6. Make Improvements

Writing a business emergency plan is not a one-and-done process. After testing and training, ask for feedback from experts both within and outside of your company. For example, you might want a representative from your local fire department to weigh in on your fire emergency plans. 

You might ask these experts, as well as your staff, for input on areas where the plan could be improved upon, for instance, and then brainstorm solutions. 

Then test those improvements. As your business changes and grows, your plan will likely need to be modified again, and experts recommend that the plan be reviewed at least annually. 

Image Credit: Charday Penn/istockphoto.

7. Distribute the Plan and Train Your Team

Once the business emergency plan is approved, make sure that everyone in the company gets a copy and is trained in how to respond to emergencies.

When a new employee is hired, make this training a part of the onboarding procedures. The Occupational and Safety Health Administration (OSHA) notes that all staff members should know their individual roles and responsibilities, understand the communication procedures, know where to take shelter, and be aware of the location of emergency equipment and how to use it.

Companies may also wish to train employees in first aid procedures and how to protect themselves against bloodborne pathogens. 

Image Credit: mapo/istockphoto.

8. Plans for Emergency Funding

Unexpected situations can cost companies money, so it may be beneficial to know how to get emergency business loans, if needed. There are numerous types of emergency financing, and it can make sense to think about both the short- and long-term implications of each before you actually need the money. 

Factors you might want to consider when you’re looking at different kinds of emergency funding include the total cost to borrow, taking into account the interest rates and fees charged, as well as repayment conditions and terms. Payments may be due monthly or weekly, and the latter could cause problems with business cash management, especially during an emergency. Also consider how long it might take to apply and get funded for each type of loan.

Image Credit: cream_ph/istockphoto.

Types of Emergency Funding

Here are a few of the most popular forms of emergency small business funding.

  • SBA Economic Injury Disaster Loans. The Small Business Administration (SBA) offers Economic Injury Disaster Loans (EIDL) with the aim of helping small businesses with financial challenges resulting from a disaster. These loans offer low interest rates and loan terms up to 30 years. On the negative side, the application process may be lengthy and there are restrictions on what you can use the loan for.
  • Business Line of Credit. If you want to be prepared for an emergency that may or may not happen, you might want to consider a business line of credit. Much like a credit card, a line of credit makes a certain amount of funding available for you to draw on at will. If you don’t draw on it, you won’t need to pay it back. If you do draw some out, you’ll be charged interest only on that amount. 

Image Credit: FG Trade/istockphoto.

Alternatives to Emergency Loans

If you’re already in the midst of an emergency or if none of the options above appeal to you, you may be wondering how to apply for a business loan when you’re actually in the middle of an emergency. 

Lenders today include both traditional brick-and-mortar institutions and online ones. In an emergency, an online lender may be particularly appealing due to its special advantages.

Advantages to online small business loans include the following:

  • More flexibility in the amount that can be borrowed, the loan term, and the qualifications required.
  • Less paperwork and faster processing times.
  • Easier to compare online loans, thanks to web-based comparison tools.
  • Borrowers with high risk levels may be able to qualify more easily with online lenders.

Disadvantages to online borrowing include:

  • Online loans may be more expensive in terms of interest.
  • There’s usually limited in-person interaction involved in an online loan.
  • Some online lenders may not be well-established yet.

It’s a good idea to make sure that the online lender you choose is trustworthy. Check to see if it’s registered in your state, if it’s a lender that you’ve heard of, and if it has good recommendations and reviews. Look up its Better Business Bureau rating and check to see if it abides by the Small Business Borrowers’ Bill of Rights.

Image Credit: Yuri_Arcurs/istockphoto.

The Takeaway

When an emergency strikes, it’s too late to prepare. That’s why having a business emergency plan in place is necessary. If your business and your staff know what to do ahead of time for various contingencies, you may be able to minimize the danger and damage from what could otherwise be a disaster. 

Knowledge is also key when your business needs a loan, whether it’s to tide you over due to an emergency or to finance a major equipment upgrade. 

This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.

Lantern By 

SoFiSoFi receives compensation in the event you obtain a loan, financial product, or service through the Lantern marketplace. This Lantern website is owned by SoFi Lending Corp., a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license number 6054612; NMLS number 1121636. (nmlsconsumeraccess). This site is NOT owned and operated by SoFi Bank. Loans, financial products, and services may not be available in all states.

All rates, fees, and terms are presented without guarantee and are subject to change pursuant to each provider’s discretion. There is no guarantee you will be approved or qualify for the advertised rates, fees, or terms presented. The actual terms you may receive depends on the things like benefits requested, your credit score, usage, history and other factors.

*Check your rate: To check the rates and terms you may qualify for, Lantern and/or its network lenders conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender(s) you choose will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

All loan terms, including interest rate, and Annual Percentage Rate (APR), and monthly payments shown on this website are from lenders and are estimates based upon the limited information you provided and are for information purposes only. Estimated APR includes all applicable fees as required under the Truth in Lending Act. The actual loan terms you receive, including APR, will depend on the lender you select, their underwriting criteria, and your personal financial factors. The loan terms and rates presented are provided by the lenders and not by SoFi Lending Corp. or Lantern. Please review each lender’s Terms and Conditions for additional details.

Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website on credit (consumer.ftc.gov)

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.¹

SoFi’s Insights tool offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score provided to you is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

Personal Loan

SoFi Lending Corp. (“SoFi”) operates this Personal Loan product in cooperation with Engine by MoneyLion. If you submit a loan inquiry, SoFi will deliver your information to Engine by MoneyLion, and Engine by MoneyLion will deliver to its network of lenders/partners to review to determine if you are eligible for pre-qualified or pre-approved offers. The lenders/partners receiving your information will also obtain your credit information from a credit reporting agency. If you meet one or more lender’s and/or partner’s conditions for eligibility, pre-qualified and pre-approved offers from one or more lenders/partners will be presented to you here on the Lantern website. More information about Engine by MoneyLion, the process, and its lenders/partners is described on the loan inquiry form you will reach by visiting our Personal Loans page as well as our Student Loan Refinance page. Click to learn more about Engine’s Licenses and DisclosuresTerms of Service, and Privacy Policy.Personal loan offers provided to customers on Lantern do not exceed 35.99% APR. An example of total amount paid on a personal loan of $10,000 for a term of 36 months at a rate of 10% would be equivalent to $11,616.12 over the 36 month life of the loan.

Student Loan RefinanceSoFi Lending Corp. (“SoFi”) operates this Student Loan Refinance product in cooperation with Engine by MoneyLion. If you submit a loan inquiry, SoFi will deliver your information to Engine by MoneyLion, and Engine by MoneyLion will deliver to its network of lenders/partners to review to determine if you are eligible for pre-qualified or pre-approved offers. The lenders receiving your information will also obtain your credit information from a credit reporting agency. If you meet one or more lender’s and/or partner’s conditions for eligibility, pre-qualified and pre-approved offers from one or more lenders/partners will be presented to you here on the Lantern website. More information about Engine by MoneyLion, the process, and its lenders/partners is described on the loan inquiry form you will reach by visiting our Personal Loans page as well as our Student Loan Refinance page. Click to learn more about Engine’s Licenses and DisclosuresTerms of Service, and Privacy Policy.

NOTICE: The debt ceiling legislation passed on June 2, 2023, codifies into law that federal student loan borrowers will be reentering repayment. The US Department of Education or your student loan servicer, or lender if you have FFEL loans, will notify you directly when your payments will resume For more information, please go to here

If you are a federal student loan borrower considering refinancing, you should take into account the new income-driven payment plan, SAVE, which replaces REPAYE, seeks to make monthly payments more affordable, and offers forgiveness of balances that were originally $12,000 or lower after 120 payments, among other improvements. Also, please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans, such as SAVE, or extended repayment plans.

Auto Loan RefinanceAutomobile refinancing loan information presented on this Lantern website is from Caribou, AUTOPAY, Engine by MoneyLion, and each of Engine’s partners (along with their affiliated companies). Caribou, AUTOPAY, and Engine by MoneyLion pay SoFi compensation for marketing their products and services on the Lantern site. 

Auto loan refinance information presented on this Lantern site is indicative and subject to you fulfilling the lender’s requirements, including but not limited to: credit standards, loan size, vehicle condition, and odometer reading. Loan rates and terms as presented on this Lantern site are subject to change when you reach the lender and may depend on your creditworthiness, consult with the lender for more details. Additional terms and conditions may apply and all terms may vary by your state of residence.

Secured Lending DisclosureTerms, conditions, state restrictions, and minimum loan amounts apply. Before you apply for a secured loan, we encourage you to carefully consider whether this loan type is the right choice for you. If you can’t make your payments on a secured personal loan, you could end up losing the assets you provided for collateral. Not all applicants will qualify for larger loan amounts or most favorable loan terms. Loan approval and actual loan terms depend on the ability to meet underwriting requirements (including, but not limited to, a responsible credit history, sufficient income after monthly expenses, and availability of collateral) that will vary by lender.

BankingSoFi Lending Corp. (“SoFi”) operates this website in cooperation with Engine by MoneyLion presenting promotions for products and services offered by other banks, lenders, and financial institutions. If you select a promotion above, you will be connected to the website of the company offering the product. The promotions presented on this site are from companies that pay SoFi and Engine by MoneyLion compensation for marketing their products and services. This may affect whether a provider is featured on this site and could affect the order of presentation. Lantern and Engine by MoneyLion do not include all providers in the market or all of their available offerings. Click to learn more about Engine’s Licenses and DisclosuresTerms of Service, and Privacy Policy.

Image Credit: JohnnyGreig/istockphoto.

More from MediaFeed

Have a disability? There are lots of options for financial help

Image Credit: SeventyFour/istockphoto.