Key Takeaways
Most small businesses aren't prepared — 69% have no disaster plan, and 36% couldn't pay employees beyond one month after a disaster — despite 94% believing they'd recover.
Start with a risk assessment — Know which natural disasters are likely in your region, and rank them by probability and potential business impact. FEMA's Hazard Identification and Risk Assessment tool can help.
Build a business continuity plan (BCP) — Document which employees, equipment, and processes are essential to keep operating — you only have to build it once, then update it.
In 2026, the U.S. Chamber of Commerce Foundation released some eye-opening stats about small businesses and disaster preparedness:
Despite record disaster occurrences and costs in 2025, 69% of small businesses have no disaster plan in place.
94% of small business owners believe they'd recover from disaster, yet 66% aren’t familiar with the kinds of disasters common to their region, and 80% have no disaster budget.
36% of small businesses can't pay employees beyond one month after a disaster.
In a climate where small businesses in the U.S. are especially vulnerable to natural disasters—in 2025, the United States experienced 23 weather and natural disasters that each caused at least $1 billion in damage—there’s no better time to have a disaster recovery plan (DRP) in place.
Here are the key steps you can take to make sure your business is prepared for a natural disaster.
Step #1: Assess your risks.
Until you think it through, it’s hard to know what a worst-case natural disaster scenario would look like for your business. It’s likely to be different for a dry cleaner in a wildfire-prone area than for a wholesale bagel factory in South Florida.
Think about risks your business is susceptible to. Then, rank those risks by the probability of them actually occurring. If that risk did occur, how severe would its impact to your business be?
Common risks
One piece of assessing risk is determining what major disasters are likely in your region:
Florida, the mid-Atlantic states, and the Gulf Coast are prone to hurricanes.
The Mountain West and Southwest suffer forest fires and poor air quality routinely, especially in this prolonged era of drought.
Oklahoma and other Plains states are notorious for deadly tornadoes.
Blizzards and ice storms are common in New England and around the Great Lakes.
Earthquakes rattle California, Oklahoma, and Alaska.
Volcanoes erupt in Hawaii and Washington.
The Federal Emergency Management Agency (FEMA) website offers a Hazard Identification and Risk Assessment tool to help you figure out what could affect your business.
How to assess risks to your business
To make sure you’ve covered all the bases, ask yourself these questions:
What is the immediate physical risk to me and my employees?
What is the immediate risk to my business operations overall?
How likely is it that I won’t be physically able to get to my business?
Are there disasters that can happen to my suppliers or customers that would affect my business?
A short interruption often does not create a big impact, but if a small business needs to close for a week, losses can start to pile up. If people see your doors are closed, they may not come back immediately. So it pays to recognize and spend time preparing for events that could put your business out of commission.
Step #2: Prepare with plans and processes.
Without a plan in place, you won't know what to do the moment disaster hits. That’s exactly why business continuity plans (BCPs) exist: so you have a documented set of procedures to turn to instead of guessing under pressure.
Start with a business impact analysis: make a list of everything your company does, then figure out which employees, procedures, and equipment you need to keep things operating. You’ll also want to weigh the financial impact of losing each one, since a day without a point-of-sale system hits you differently than a day without your delivery van.
It sounds like a big lift, but you only have to build a business continuity plan once. After that, you’re just updating it.
To start, ask the following questions:
What’s the most important business function I need to protect?
Do I have employee and banking contact information on hand, plus a communication plan for how I’ll pay employees if they scatter amid a crisis?
What bills do we have to pay as a business no matter what?
What software, hardware, or machinery keeps our business running? What does it do, and is it insured as a physical asset?
Is there a data backup routine in place, with a recovery point objective (how much data we can afford to lose) and a recovery time objective (how fast we need it back) that actually match how our business runs?
Have I assigned employees to specific tasks, and do they know what they’re responsible for under our emergency response plan?
How can we all get our work done remotely if the office is inaccessible? Say, after a power outage or hardware failure takes out our usual setup?
You can also build risk management into your day-to-day processes, by doing things like storing items that can get damaged by water in plastic containers.
Your disaster recovery strategy should also spell out basic emergency procedures (like an evacuation plan for your team) so everyone knows what to do to stay safe in a natural disaster, not just how to keep the business running.
Still not sure how to start planning? A great first step is to fill out IBHS's free “Stay Open For Business” questionnaire.
Step #3: Make sure you have insurance coverage.
There’s nothing simple or obvious about insurance. But without it, your business could be quite literally underwater with no recourse. The good news? You can reach out to an insurance agent who is an expert, and they’ll be able to tell you exactly what kind of policy you need.
Reading online reviews and chatting to other business owners about who helped them find their coverage can lead you to the right agent. If you’re not sure which businesses to talk to, think back. Have any businesses been affected by natural disasters in your area? Reach out to those businesses and ask them who they had their policies under. Then ask them about their experience: Did their agent go to bat for them? Did they get their claims paid? This information can tell you a lot.
Whatever you do, don’t act as your own agent and choose a cookie-cutter policy. This might save you money in the near-term, but when the calamity hits, you’ll be on your own.
Step #4: Secure your vital business information somewhere.
One vital aspect of operational resilience is making sure your most important information isn’t kept solely on-site. You should have remote access to everything, from customer lists to accounting information.
To make sure you’re protecting your vital information, ask these questions:
Do I have contact and emergency contact information for employees, suppliers, lawyers, accountants, and local utilities?
Do I have the documents and contact information for all types of insurance we’ve purchased?
Do I have a digital copy of all our contracts, including leases?
Does at least one person other than me have a way to access all of this?
Step #5: Don’t rely solely on the government.
The notion that some public agency or charitable organization is going to swoop in after a major disaster is a widespread misunderstanding. Their most pressing responsibilities are ensuring people are safe, sheltered, and fed. Getting your barber shop back on its feet is not their job.
The government does offer low-interest 30-year loans of up to $2 million through the Small Business Administration for physical damages or working capital. Be prepared, though:
Don’t visit your local Small Business Development Center, the SBA’s regional outposts, until you have every bit of paperwork or documentation required to apply.
Set aside a full day for the lengthy in-person application process.
Be prepared in case the loan funds don’t arrive immediately.
Contact your local elected officials if disbursement of the money takes more than a month.
Such help can stabilize a business, but it’s no path to prosperity.
Step #6: Review your plans regularly.
You’re not done once you’ve created your contingency plans for disasters. They need to be reviewed on a regular basis to make sure that all of the contact information is up to date, all the latest documents are in the cloud, and all the employees know what to do.
As a rule of thumb, you should make sure you have everyone’s correct mobile phones, residence phones, and email addresses every six months or so. This goes for employees, key customers, and vendors.
If all of this scares and overwhelms you, you’re not alone. But the good news is that a few hours of prep now means you won't be scrambling for answers when it matters most.
FAQs
What is a business continuity plan?
A business continuity plan (BCP) is a documented set of procedures that keeps a business's critical operations running during and after a disruption like a natural disaster. It identifies the people, equipment, and processes essential to keeping the business open, so owners have clear steps to follow instead of improvising during a crisis.
What are the biggest natural disaster risks for small businesses?
The specific risks depend on location: hurricanes threaten Florida, the mid-Atlantic, and the Gulf Coast; wildfires are common across the Mountain West and Southwest; tornadoes hit Oklahoma and other Plains states; and earthquakes affect California, Oklahoma, and Alaska. Business owners should also weigh less obvious risks, like whether a disaster could disrupt suppliers or keep employees from reaching the business.
Does the SBA offer loans to small businesses after a disaster?
Yes, the SBA offers low-interest disaster loans of up to $2 million, with terms as long as 30 years, for physical damage or working capital. Applying takes thorough paperwork and can require a full day at a local Small Business Development Center, and funds don't always arrive right away, so treat this aid as a stabilizer, not a fast fix.
How often should a business continuity plan be updated?
A business continuity plan should be reviewed at least every six months to keep contact information, insurance documents, and procedures current. At minimum, confirm that phone numbers and email addresses for employees, key customers, and vendors are accurate, and make sure critical documents are backed up somewhere accessible if the original office isn't.
Quick note: This is not to be taken as tax, legal, benefits, financial, or HR advice. Since rules and regulations change over time and can vary by location, consult a lawyer or HR expert for specific guidance.
