Table of contents
With so many moving pieces and dependencies involved in running a business, a disaster can strike at any time, forcing your business to close, or severely slow down. A temporary power or internet outage, or a more extreme burst pipe or faulty wiring, may seriously disrupt your ability to operate.
Learn how to prepare for common issues that may arise in your business, as part of your business continuity plan so you can keep things running in the face of an emergency.
Electrical issues
Losing power can lead to lost sales, lost inventory, or even force your business to temporarily close. Depending on the severity, a power failure in your building’s system or an area-wide electrical outage, may last anywhere from a few minutes to several days. Being prepared for power outages can help mitigate disruption and lost revenue for your business.
Wiring checkup
Faulty wiring or underpowered systems can cause power outages, damage to appliances, electrical fires, and other problems. You may be able to prevent some electrical issues by ensuring your system is up to code. Hiring an electrician to run an evaluation of your current electrical system is an important step.
A licensed professional can spot issues and potential hazards before they arise, giving recommendations on how to fortify your system. Some solutions they may suggest include upgrading your panels to supply more power, running new wiring, and installing new outlets to eliminate extension cords. While there is a cost associated with these improvements, the risk mitigation by having a safer system may very well be worth the price.
Backup power
While some power outages may be out of your control due to storms or network failures, there are still steps you can take to minimize disruption. Installing a backup power system can help keep your business up and running during an outage.
The most accessible option is an uninterruptible power supply (UPS). These devices are small battery backups, often attached to surge protectors, that instantly kick on to continue to provide electricity as soon as the power is disconnected. The power they provide is limited and is best suited for a few essential small devices. This includes network routers, point-of-sale systems, digital menu boards, and other mission-critical devices that don’t draw a lot of power.
If your business is prone to power outages and needs a lot of appliances to stay running, a whole-system backup is ideal for larger needs. Whole-building options include a gas-powered generator, a large battery backup system, or even a set of solar panels. These systems can keep power flowing to more of your essential equipment through more extensive outages.
Internet downtime
So many parts of businesses today rely on the internet. Point-of-sale systems, kitchen display systems (KDS), digital menu boards, ambient music, and security systems, are all connected to the internet. Dealing with even a temporary internet outage can severely disrupt your ability to operate your business.
Backup internet
Some internet outages are simply the result of power outages. Plugging your modem and router into a backup power source can help keep your internet running when you only lose electricity. For more widespread outages, it’s a good idea to have a backup internet service to keep your connection going. Some devices, like tablets, have the option to add a cellular plan to directly access the internet for an additional fee.
If your device isn’t capable of adding a cellular plan, a backup hotspot can provide internet access as long as there is cellular service. Depending on your mobile plan, your personal cellphone may act as a hotspot. If not, you could buy a separate designated hotspot device as a backup.
There are times where you cannot get an internet connection and still need to continue running transactions. Point-of-sale system like Square have an offline mode. If you don’t have internet access, or even in the event of Square service disruption, you can still process payments offline so you never miss a sale.
Equipment failure
If your business relies on any kind of equipment or appliance, it will break down at some point. It could be a fridge or freezer, air conditioner or heating system, oven or manufacturing equipment; if it’s mechanical, then it’s subject to failure. You can reduce your business’s downtime by being prepared for the inevitable and having contingency plans in place.
Maintenance
Performing regular maintenance is important to keep any kind of machinery running smoothly. Consult your owner’s manuals and look up best practices to see what kind of maintenance this entails. Many machines need consistent re-oiling, lubricating, and topping off fluids. You should also establish a regular cleaning schedule, along with seasonal deep cleans, including hard-to-reach areas like interiors and vents. All of this can help prevent breakdowns and keep your business fully operational.
Repair
No matter how much you maintain your equipment, there will come a time when it needs repairs. Having a good repair person or company on call to reach out to when something goes wrong is critical to prevent downtime. Building up a relationship and having a single designated place to turn when your machinery breaks down can help get you back up and running quickly.
Backup equipment
Even with a maintenance person on call, breakdowns can happen when they’re off-duty, or issues may take longer than expected to repair. If it’s mission-critical to your business, it’s a good practice to have some backup systems in place to keep things running in the event of a breakdown.
You may want to consider having redundancies in place in the form of secondary equipment. If you recently upgraded your systems and have extra space, you may want to hold on to older equipment as a backup. Otherwise, be aware of or invest in a cheap replacement that you could use in a pinch if something goes wrong.
Water damage
Any level of flooding can be damaging to a business. It could be from an incoming storm, being located in a high flood-risk area, or having a basement that typically collects water. Taking steps to reduce your risk can help minimize water damage and flood impact.
Plumbing issues
Similarly to your electrical system, it’s a good idea to have a plumber come in to do a full assessment of your pipes. They can spot any weaknesses and suggest improvements that can be made. The most common issue is a leak coming from pipe connection points or your hot water heater. If these issues aren’t addressed, even a small leak can grow and lead to serious damage.
In colder climates, there may be risk of pipes freezing and bursting. Wrapping and insulating your water lines is a worthwhile investment to help prevent flooding in your business.
Minimizing flood damage
Any amount of flooding can be catastrophic to your building infrastructure and equipment. Water damage threatens your flooring, walls, electrical system, and anything you may have standing on the ground. You can reduce additional losses by elevating storage, supplies, and key equipment off of the floor, either permanently or as a temporary precautionary measure.
In extreme cases of massive storms, it can be good to have an extra line of defense against water seeping into your business. Consider investing in sandbags or other deployable flood prevention if your area is prone to flash floods.
Fire hazards
Fire damage can be absolutely devastating to a business. Some common cases are cooking fires, electrical fires, and wildfires. Whether the fire started from your business or is spreading from a neighboring building, you can take precautions against common fire risks that may happen in your business with planning and preparation.
Inspection and assessment
If it’s not already part of your permitting process, your local fire department may provide inspections and assessments of your space. They can give you key information and education, spot potential fire hazards, and give recommendations of how to best protect your business in the event of a fire.
Fire suppression
Your first line of defense to stop or prevent the spread of a fire is a good fire suppression system. At the very minimum, handheld fire extinguishers are a must. Make sure they’re in key areas of your business, easily visible and accessible, and inspected every year.
You may also want to consider more extensive fire suppression systems like whole building sprinkler systems. They may be required depending on your local codes and regulations, as well as your business type. For example, if you’re a restaurant with a kitchen, an over-the-stove fire suppression system can quickly and easily put out grease fires.
Exit strategy
While business and property loss can be devastating, the most important thing is the health and safety of you and your team. It’s important to create an escape route and a plan in the event of a fire. Write this plan down, set up a muster point, and practice fire drills with your team regularly. Make sure your exits are clearly marked, illuminated, and accessible. As an additional precaution, if you’re in a place where wildfires are prevalent, make sure you have an evacuation plan and route communicated as well. In the event of a disaster, stay up to date with emergency response procedures, and follow all local instructions.
Financial hardships
The common factor for preparing and recovering from all of these emergencies is the money it takes. Dealing with common financial issues like unexpected expenses can be challenging, but there are resources available to help and grant you access to more cash flow when you need it the most.
Insurance
Having insurance is an important part of protecting and continuing your business in the wake of an emergency. Insurance can potentially pay for lost sales during closures, damaged inventory, costs of renovations or repairs, and other expenses. You may also be legally required to hold it, depending on your location and business type.
On top of basic coverage, you can customize your plan to add additional coverage based on your needs, location, and other concerns. This can include additional protection in the event of floods, fires, natural disasters, and more emergencies.
Whether or not you already have insurance, it is worth it to research business insurance options available in your area, or audit your current coverage. Take your time to assess the additional costs of more extensive plans, and consult a professional to understand what is best for your situation.
Emergency fund
Having money set aside for emergencies in a savings account can save your business from financial ruin when disaster strikes. Experts recommend funding your emergency reserves with at least three to six months of expenses, so you can cover the majority of unexpected costs. While it can sometimes be a challenge to just pay the bills, it’s important to set aside savings on a consistent basis for the longevity of your business.
Establishing and regularly putting money into a business savings account can help you master your cash flow. To track how much your business can set aside, create a budget and cut down on expenses where you can. With Square Savings1, you can automatically transfer a percentage of your sales to designated savings folders for each of your spending goals. With a fully funded emergency account, you can have the money on hand when you need it the most.
Financial relief and assistance
If you’re in need of more funds, there are sources of financial relief available to business owners working hard to reopen businesses after facing emergencies and disasters. There is a wide range of small business grants available that you can apply for. If you’re not eligible for a grant, small business loans are an additional option to secure funding to keep your business running.
1Savings accounts are provided by Square Financial Services, Inc. Member FDIC. Accrue annual percentage yield (APY) of 1.00% per folder on folder balances over $10. APY subject to change, current as of 2/18/2025. No minimum deposit is required to open an account. Accounts will not be charged monthly fees. Accounts are FDIC-insured up to $2,500,000. Pending balances are not subject to FDIC insurance.
