Prepare Your Gym for a Natural Disaster Before It Strikes

The average loss to a small business after closing due to a major storm is $3,000 per day. According to FEMA, 40% of small businesses do not reopen after a natural disaster.

Is your gym equipped to handle the next big natural disaster? We’ve put together some information to help you prepare for and recover from a disaster as soon as possible.

Know Your Risks

Start by familiarizing yourself with the most likely risks in your area. Natural disasters vary drastically from state to state.

Susan Cutter, director of the Hazards & Vulnerability Research Institute at the University of South Carolina, provides fascinating insights into the prevalence of natural disasters across the country. For example, Florida, California, and Louisiana lead the country in largest economic costs from natural disasters. However, the unfortunate honor of most hazard-related deaths belongs to Texas, followed by Illinois, and then California. Hurricanes are the most expensive disaster, while severe temperature changes, such as heat waves, claim the highest number of fatalities.

Knowing what you should be preparing for can help you gather the applicable supplies, as well as choose the correct insurance coverage.

Assess Your Readiness

First, you need to complete a Business Impact Analysis (BIA). A BIA is a risk assessment to predict potential consequences of a disruption to your business. This information can then be used to develop recovery strategies.

A thorough BIA evaluates your readiness to resume operations and should identify how you would respond to the following scenarios:

1. Lost or delayed sales and income. How long could you afford to remain closed? How long could you withstand a temporary closure?
2. Increased expenses. Can you afford overtime labor in the immediate aftermath? Can you make necessary fixes before an insurance claim is processed?
3. Regulatory Fines.
4. Contractual penalties or loss of contractual bonuses.
5. Customer dissatisfaction or loss of memberships.
6. Delay of new business plans.
7. Changes in staff. What if your staff quit or move away following a disaster? Where will you cultivate new talent/employees from?

Being ready when a natural disaster hits requires preparing for both immediate necessities and future continuity. The BIA allows you to brainstorm answers that impact both of these aspects. After assessing your readiness, get to work increasing your preparedness in the immediate aftermath of an emergency and strengthening your business so that it is able to bounce back quickly.

Select the Right Insurance Coverage

The correct insurance coverage can also help minimize potential costs associated with the damages caused by a natural disaster. Here are two actions you should take before choosing the coverage that is best for your business.

1. Talk with your agent or provider about the scope of your policy coverage. Discuss how you should file a claim when the time comes. What type of proof will they want (photographs, receipts, etc.)? Ask about deductibles and multiple scenarios. There may be differences in coverage that are dependent on whether your business is damaged or destroyed.
2. Consider how you will pay your employees. Forbes recommends doing a cash flow analysis during your BIA. This will help you see how much money you can reasonably use to cover overhead and keep paying employee wages without a steady income. Insurance claims also take time to process, so factor in that you may have to cover a number of upfront expenses without an immediate reimbursement.

Prepare

In the event of a power outage, 71% of small businesses lack a backup generator. In many cases, preparation is a mixture of having necessary emergency supplies and having a plan to protect your employees, visitors, and property (equipment). FEMA provides a comprehensive set of emergency plan templates to help you create a reaction plan after you assess your club’s risks. At the very least, your plan should address evacuation, severe weather sheltering, and responsibilities staff should take on during a disaster.

Talk to your team about what emergency supplies the club can feasibly provide, if any, and which ones staff members should consider keeping on hand. FEMA has multiple lists of recommended emergency supplies to have on hand. Common items that might be useful include a wrench or pliers (to shut off utilities), a battery-powered radio and batteries, garbage bags, flashlights, and duct tape.

It’s also important to find out what records your insurance provider will want to see after an emergency so you can prepare in advance.

In some ways, health clubs are at an advantage in short-term emergency situations because many are required to have an easily-accessible first aid kit on the premises and trained employees on duty to respond to any health emergency that could require an AED or CPR.

FEMA also recommends that business owners keep copies of important records such as sitemaps, building plans, insurance policies, employee contact and identification information, bank account records, supplier and shipping contact lists, computer backups, emergency or law enforcement contact information, and other priority documents in a waterproof, fireproof, portable container. Ninety-four percent of small businesses back up critical financial data but only 40% keep that data off-site. Make sure to safely store a second set of these records at an off-site location.

Craft a Recovery Plan

After completing your BIA, you will have a more realistic view of how well your business would be able to respond in an emergency. This knowledge can be used to craft your business continuity—or disaster recovery—plan. While the content in this plan will vary based on which potential disaster you are preparing for, business continuity plans can often be applicable across various closures.

Why is this important? According to FEMA experts, 75% of businesses without a business continuity plan fail within three years following a disaster. Your recovery plan will serve as your roadmap in responding to unplanned incidents, allowing you to reduce potentially disruptive consequences, and minimize the time until you resume operations. For this last piece of the plan related to how soon you’d like to resume regular business, experts recommend you also establish a recovery time objective, which will firmly establish when you’d like to be operating at full efficiency again.

It’s important to make sure the information in the plan addresses the following objectives:

1. Minimize injury, as well as property and equipment damage
2. Reduce the severity and duration of disruption to operations
3. Resume essential functions quickly
4. Protect members, employees, records, facilities, equipment, and assets
5. Provide a framework to move forward

Manage Competing Responsibilities

When you move into the recovery phase following a disaster, keep in mind that you will have duties to multiple parties, all with competing needs. When crafting and implementing your business continuity plan, you need to plan to effectively communicate with these three groups of people:

• Your clients. Clients want to know how long you might be closed and when you will reopen, so being transparent with this information is key. Social media is a blessing in this way. After Hurricanes Harvey and Irma, fitness centers throughout Houston communicated their closings via social media. Obviously not everyone may have internet access, so you should also have one person answering the gym’s phones and informative signs at your entrance.

• Your insurance company (as well as property manager/whoever holds your lease). The club is going to need extensive documentation of damage. Note that claims may need to be filed before certain deadlines. Immediately after the disaster, extensively document the property damage with photos—particularly before beginning cleanup or preservation. Give these photos to your insurance company, your mortgage holder, your equipment vendor, and to members so you can show how the disaster impacted your club. It’s also a good idea to have recent photos showing the property before the emergency, for comparison.

• Your employees. Staff members will need effective communication and support. They may have their own cleanup needs, or be handling their own disaster insurance claims. It’s best to be direct in communicating your needs. Do you need them to come in to help with cleanup? Are they available or are they dealing with their own devastation? Are they expected to come in for their shift during a storm or when the gym is closed? You must provide them with instructions on how they can best help you. One gym owner emphasized building good employee relationships before a disaster strikes because if you want an employee to show up early for work to help cleanup after a disaster hits, you’re going lean on pre-existing rapport to ask them to make that sacrifice.

One way to manage your obligations to your employees is to create a severe weather policy. There are guides available to help formulate an inclement weather policy. The policy should clarify expectations for employees, explain how compensation will be handled, and explain your attendance and communication policies for severe weather and natural disasters.

What will you do if your employees cannot safely get to work? According to Preparis, which offers emergency tools for businesses, if your local public transportation is closed, you should follow the local government's recommendations to avoid increasing liability by asking your employees to travel. Preparis also recommends paying attention to local laws. In some places, if there is no power in the building—even a backup generator—it is not legal to be open.

Be Ready Before It’s Needed

While creating an effective and functional disaster recovery plan may seem like the last thing you want to do, your biggest asset will be preparation. Completing an honest business impact analysis will help you create the most effective recovery plan that you can use when a disaster hits. Having relevant insurance policies and your financial documents backed up off-site will ease stress when initiating your emergency response. If you have any additional questions, please contact IHRSA.