When it comes to dealing with unforeseen disasters that could cripple a business, black entrepreneurs are more prepared for disaster recovery than other groups.
One of the the most surprising findings from Nationwide’s third annual survey of 1,000 business owners is African American owners are more likely than Hispanic or Caucasian owners to say they have a plan in place to protect employee data (56%), a disaster recovery plan (46%), and a cyber-attack response plan (41%), says Mark Berven, president of property and casualty at Nationwide.
The annual survey did not ask why they are more likely to have these types of plans, but increased awareness of these issues is probably a key factor, Berven says.
Most Business Owners Have No Plans
At the same time, business owners report it’s important to plan for cyber attacks, natural disasters, and succession. Yet most owners say they don’t have formal disaster recovery plans in place, though catastrophic weather events keep rising and ransomware attacks are becoming more common. Businesses with one to 299 employees responded to the survey.
Berven says the biggest mistake a small business can make is believing that it could never happen to them. He added the survey shows that about one in five business owners have already been impacted by a natural disaster, yet only 23% report that they have created a preparedness program as recommended by the U.S. Small Business Administration (SBA).
“Business owners are the backbone of our economy, so it’s crucial that they remain prepared,” he says. “Whether it’s planning for a disaster or enduring an unexpected event like a cyber attack, the viability of businesses across the country is a requirement for a healthy economy that we can’t ignore.”
One of the main advantages of having a business preparedness plan is that you can potentially keep your business running during a disaster, Berven says.
“You should have access to generators, vital records, and alternative suppliers that can all help keep your business alive.”
Business Owners’ Disaster Perceptions Vs. Reality
Nationwide’s survey asked business owners to report their experience across a wide range of topics. The results revealed alarming discrepancies in how business owners think vs. how they behave in three main categories:
-Cyber attacks: 83% of owners report that they believe it’s important to establish security practices and policies recommended by the SBA to protect sensitive information, but only 50% say they have established security practices to protect sensitive information.
-Disasters: 64% of owners say it’s important to create a preparedness program as recommended by the SBA, yet only 23% report that they have created one.
-Succession: 65% of owners say that they believe it’s important to choose a successor for their business as recommended by the SBA, even though only 37% actually have a business succession plan in place.
Millennials are more likely than Baby Boomers or Gen Xers to say it’s important to create a business succession plan (38%) and build disaster preparedness kits (35%). They say they are also more confident in securing a financial future (82%).
Further, African Americans (86%) are more confident in securing a financial future.
5 Tips to Launching a Business Disaster Preparedness Plan
Berven offered some tips a new or existing business should consider to establish a plan:
1. Download the business continuity toolkit from the Insurance Institute for Business & Home Safety website
2. Have an alternative way to reach key employees, vendors, and customers
3. Have access to generators and alternative suppliers
4. Duplicate and store company vital records off-site
5. Make an inventory, and keep company contents away from openings.
To help business owners prepare and protect their businesses for the future, Nationwide recently launched the Business Solutions Center, a new online suite of solutions that can support them during key stages of development.
Business owners can also learn how to create a cybersecurity plan, disaster plan, and succession plan through the SBA.