Although extreme weather events like Hurricane Sandy and Winter Storm Nemo,
the massive blizzard that recently paralyzed the northeast U.S., appear to
be occurring more frequently, small retailers and e-tailers say they are
unprepared for natural disasters-even though repercussions such as lengthy
power outages could sink their businesses.
Nearly three out of four small business owners do not have disaster recovery
plans, and 84 percent do not carry natural disaster insurance, according to
a survey of SMEs conducted by e-commerce companies Alibaba.com, Vendio and
Carried out in December in the wake of Hurricane Sandy, the survey polled
600 small retailers, most of them selling goods and services online.
71% of survey respondents said their businesses lacked a back-up generator
that could be used in case of electrical outage. Some said they would be
forced to close down if storm damage was "severe."
Survey participants were not asked why they had no contingency plans for
coping with natural disasters. It's reasonable to assume not all are
fatalists. A more likely explanation is that most small businesses are hard
pressed to shoulder the costs of maintaining back-up systems or paying for
insurance. Many of the respondents were home-based companies with fewer than
five employees, although small companies running warehouses and small
bricks-and-mortar shops also participated.
Lack of awareness could also account for complacency. Slightly more than
three out of four respondents said their businesses had never been affected
by a natural disaster. About two out of three respondents said that even if
disaster strikes, they believed they could run their businesses from mobile
devices such as a tablet computers as long as area cellphone service or
wi-fi is available.