By: Brent Barnhart on Sunday, March 20, 2011The current situation in Japan as a result of the Tohoku earthquake and tsunami is a true tragedy, and with so much destruction and so many lives lost, it makes us wonder how long it’ll be until Japan is back on their feet. As we watch from the comfort of our own homes, we can’t help but ponder what we would do if we were forced into such a miserable position. While our hearts are with Japan as the country must endure this devastation, it’s inevitable that this storm will have an impact on our own shores. The economic storm that small businesses may weather in the United States may be minuscule compared to that of Japan, but the potential impact is still very real. Disasters such as these are somber reminders of our need to prepare, as well as to always expect the unexpected.
How will the disaster impact the United States’ economy? Considering that exports to Japan represent only 5% of our total production, the initial impact perhaps won’t be as drastic as some might have thought. Regardless, many small businesses in the states are feeling the hurt, concerned for their Japanese clients as overall business in Japan has come to a standstill. Additionally, there could be a shortage of auto-parts as well as Japanese electronic goods. Businesses relying on such imports will have to wait it out in uncertainly, as it’s difficult to say how long the shortage may last.
The quake-tsunami is taking its most significant toll on Japan’s fishing and agricultural regions; thankfully the storm didn’t have nearly as much impact on Japan’s automotive and electronics production, which represent a much more significant chunk of their GDP.
Gas prices, which had been skyrocketing prior to the disaster, remain a large talking point. Due to the fact that Japanese business has come to a halt, it’s believed that their demand for gas may decrease in the short term. But as the country rebuilds and considers the loss of its nuclear resources, they may have no other choice than to turn to oil. This would inevitably lead to a rise in gas prices, which as of earlier this month; the Department of Energy predicted would average $3.70 per gallon in the United States during the summer.
In addition to economic awareness, the physical disaster behind the Tohoku earthquake and tsunami is increasing awareness for small businesses and how they may protect themselves. If your business was struck by a similar disaster, where would you be? While recovering from something like a hurricane or earthquake is often far from our minds, there’s certainly no harm in being prepared for the worst.
You can’t simply recover a crumbled building from the ashes, but there are some things you can do to have a backup plan in place. Online backup is one way to keep your business’ intellectual property and documentation safe in even the worst of disasters. Having disaster insurance is perhaps a more obvious solution to prepare, especially if you’re in an area prone to earthquakes, hurricanes, or other natural disasters.
While there’s no reason for businesses in the United States to panic in regards to the Japan’s tragedy impacting the United States, the future may tell a different story. Although it’s difficult for us to imagine or even comprehend tragedies such as what’s happened in Japan, there are a number of steps you can take to increase your awareness and make sure that your small business is kept safe.