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. . . PPOO-9 Diana L. McClure, Ass't vp Showcase Programs & Special Projects Institute for Business & Home Safety 175 Federal St., Suite 500 Boston, MA 02110 (617) 292-2003 x216 Disaster Recovery for Small Businesses Business failure rates increase dramatically following a natural disaster event. These failures are due not only to damage to the building, contents and inventory, but also to the interruption of commerce that forces businesses to close their doors during critical periods. Small businesses are typically more vulnerable to disasters than large businesses. Compounding the problem, they also lack sufficient resources to plan and are less likely to take action to protect their facilities and assets. The challenge is how to capture their attention, motivate them to plan ahead, and take specific action before disaster strikes. That is why the Institute for Business & Home Safety (IBHS), in collaboration with the U.S. Small Business Administration (SBA), collaborated to create Open for Business: A Disaster Planning Toolkit for the Small Business Owner, which is being used all across the United States. IBHS, a Boston-based nonprofit, is a national initiative of the insurance industry dedicated to reducing the human and financial toll of disasters. The SBA Disaster Assistance program provides iow interest loans to businesses post-disaster to help them recover. Both IBHS and the SBA are interested in reducing losses and expediting recovery, so that businesses can stay "open for business." Reducing the need for loans _ which must be repaid - and maintaining insurance availability and affordability is important for business and community recovery, stability and sustainability. Why don't businesses recover from natural disasters? Current research is not conclusive, but we know that disaster recovery is complex. Even if excellent facilities planning keeps the building and contents intact, business losses can occur if major roadways or other transportation links are inaccessible, if electric power or water supply are interrupted, if employees cannot get to work or customers cannot physically or electronically reach the business, or if major suppliers or markets are affected by the disaster. Many small business owners do not recognize the extent and complexity of the problem, that they are at risk, or that there are things they can do to minimize disruption to their businesses. IBHS commercial insurer members think that small businesses need to understand their vulnerability. They worked with IBHS to create a toolkit that wouid capture the attention of small business owners and gear them towards disaster planning, both within their four walls and beyond. The private/public partnership with the SBA, and outreach to FEMA Project Impact communities, has generated creative uses of the guidance. IBHS member companies are using it with their agents to reach out to their customers; business to business web pages are interested in sharing the information with their customers; individual companies are using it at their facilities; and organizations are incorporating it into materials they are currently using with their constituencies. These partnerships, rooted in specific communities with linkages to businesses,'are helping to create awareness of natural hazard events, their possible impacts, and what can be done ahead of time to reduce the emotional and financial toll of natural disasters.