American Red Cross and FedEx Announce Collaboration to Help Small Businesses

A national survey of small businesses conducted by the American Red Cross and FedEx Corp. (NYSE: FDX) found that while 94 percent of small business owners believe there is a potential for a disaster to seriously disrupt their business within the next two years, only 43 percent feel prepared for a one week disruption of their business, and 22 percent feel prepared for a one month disruption. Importantly, many businesses do want to become better prepared, with almost a quarter of respondents indicating they are planning on taking steps to prepare their businesses for disaster.

Based on these findings, the American Red Cross and FedEx Corp. will create tools to help small businesses get prepared.

FedEx and the Red Cross have been working together to examine small business disaster preparedness because of the important role small businesses play in the national and global economy, as well as the safety and strength of the communities in which they are located.

“Having responded to more than 75,000 disasters nationwide last year, we’ve seen first hand how businesses with trained employees, protected resources and plans for operational continuity can decrease the physical and financial impact of a disaster, and lessen the burden on first responders,” said Darlene Sparks Washington, Director of Preparedness for the American Red Cross. “All businesses should have a disaster plan, but for small businesses, being prepared can make a difference in being able to stay in business after a disaster.”

The survey data is especially relevant considering that one in four businesses do not reopen after a major disaster such as a flood, tornado or earthquake, according to the Institute for Business and Home Safety, and considering that small businesses account for more than 99 percent of businesses in the United States alone.

“Disaster preparedness and contingency planning are core competencies at FedEx,” said David Bronczek, president and CEO of FedEx Express. “In addition to helping small businesses grow by providing unrivaled access to the global marketplace, we are delighted to leverage our planning expertise in collaboration with the American Red Cross to benefit small businesses in their disaster preparedness efforts.”

While small businesses have taken some steps to prepare their business and their employees in advance of a disaster, they lag behind on several important indicators. A majority of businesses surveyed have developed employee phone lists for notifications and communication during a disaster (86 percent); ensured the safety of important business files or records (75 percent); and purchased insurance for business disruption or damage (80 percent). But businesses are much less likely to have completed other important steps. Only 41 percent have taken preparedness steps based on the type of disasters common to the business location and only 55 percent have communicated with employees about their roles before and during a disaster.

Stacey Wieder is a practice manager at Lake Seminole Animal Hospital in Florida. She manages the hospital’s disaster planning for its 13 employees. The Lake Seminole Animal Hospital had to evacuate and utilized shutdown procedures during Hurricanes Charley and Jeanne in 2004. “By planning ahead for emergencies, the hospital is demonstrating to employees that their personal safety is important. Our employees have become better preparedness advocates and clients even tell us that our proactive planning has encouraged them to take preparedness steps,” said Wieder.

The Red Cross and FedEx are developing preparedness solutions to help small business owners develop an emergency plan and help their employees get prepared. A downloadable disaster preparedness checklist for small businesses will be made available at www.fedex.com/smallbiz, as well as discount coupons which FedEx small business customers can use to receive 10 percent off their final purchase of preparedness supplies at the Red Cross online store, www.redcross.org/store, from September 10, 2007- October 31, 2007.

Additional information on how small businesses, individuals and families can prepare for disasters is available at www.redcross.org or by contacting your local Red Cross chapter.

Survey Methodology

Macro International, Inc. conducted telephone surveys with 241 small businesses in June, 2007 to learn about how prepared they are for disasters, what specific steps they have taken, plan to take or have decided not to take to become prepared, and to gather information about tools and various resources that would assist them in preparing their business for a disaster. A random national sample of 101 small businesses has a margin of error of +/- 9.8% at a confidence level of 95%.

Minority owned businesses and businesses located in disaster prone areas were over sampled to understand specific needs and characteristics among these two groups to inform development of emergency preparedness materials and tools that encourage businesses to take action steps. For purposes of this study, the definition of a small business is fewer than 100 employees but also a minimum of seven-10 employees.