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Updated on July 6, 2007.

THE TERRORIST ATTACKS of Sept. 11, 2001, tore apart one of the nation's largest business districts, disrupting close to 18,000 small firms in New York City, forcing many to relocate or cease operations entirely. The shocking events served as a wake-up call to many entrepreneurs that emergency planning — in today's business world — is critical.

In the five years that have passed, sophisticated technologies that only big companies could afford or put in place have become cheaper, simpler and even commonplace for small businesses. Wireless devices, electronic data storage, and secure remote access has made it possible for small-business owners (and their employees) to stay connected from any location, causing less business interruption if a terrorist attack or natural disaster were to hit one specific area.

But does that mean that small businesses are better prepared for disaster? Not necessarily.

While many entrepreneurs are aware of the catastrophic damage that a disaster can cause, few have taken action in the form of basic business-continuity plans, which typically include educating staff on what to do in a crisis and retaining back-up suppliers, experts say. And technology that has made small businesses more portable is also part curse, as chaos can erupt when gadgetry like a wireless laptop or cellphone or "CrackBerry" (a term used for the now ubiquitous BlackBerrys that few knew in 2001) goes down.

The good news is that compared with five years ago, "small businesses are much more aware of what their worst-case scenarios are," says Glenn Pomerantz, partner in charge of insurance claim services at tax firm BDO Siedman LLP in New York. "That concept is much more embedded in the small-business owners' psyche."

The bad news? Business owners aren't planning enough for the "everyday" disasters, such as power outages or computer crashes. The worst-case scenarios — the terrorist attack, or the devastating hurricane or earthquake — fortunately don't happen all that often. Most people don't really think rationally about risk, and while more business owners are planning for large-scale catastrophes, they're not planning for smaller ones, says Donna Childs, whose small business, economic-development firm Childs Capital, made it through 9/11 despite its location near Ground Zero.

She recommends that business owners craft a disaster-preparedness plan with the more common occurrences in mind, such as human errors, disruptions in utilities or other services, and floods or fires. Childs, who first learned about business-continuity plans during a previous career at Swiss Reinsurance, made sure her small business had a disaster plan in place, which included everything from an evacuation plan to a stash of battery-powered laptops.

The worst she expected to deal with was a fire in a nearby subway station. "In our case, our disaster planning didn't encompass something like a 9/11," she says, "but it was enough to get us through."

Childs's small-business survival story (she was back in full operation less than a month after the attacks) is featured in the U.S. Department of Homeland Security's "Ready for Business" campaign, designed to help companies get back to business after disaster strikes. More information on the campaign can be located here. Childs also co-authored a guidebook, "Contingency Planning and Disaster Recovery." More information and tips can be found on her web site, Prepared Small Business.

Since 9/11, more disaster-recovery services also have become available to small businesses, not just big corporations. The terrorist attacks and a string of catastrophic events — the 2003 power outage that shut down the Northeast; the severe hurricane season of 2005; and more recently, debilitating heat waves in California — made it clear that small and midsize firms need help when business is disrupted.

Agility Recovery Solutions, formerly a unit of General Electric, promises to get businesses up and running and in touch with customers within 48 hours of an interruption. To do that, the company often sends a 48-seat "mobile office" trailer, which comes complete with servers, computers, Internet and phone service.

Chief Executive Bob Boyd says Agility, which had targeted big corporations, began focusing on the needs of smaller businesses after 9/11. Soon after, the company launched a disaster-recovery program that costs $250 a month for firms with fewer than 200 employees. For the fee, a small business is guaranteed help within 48 hours, although it must pay any out-of-pocket costs incurred. A mobile office unit, for instance, can cost as much as $50,000, although the bill is typically covered by the small business's insurance policy, Boyd says.

Agility relies on statistics that indicate a majority of companies that don't re-open within five days of disaster are out of business within a year. The monthly fee "might seem like a large number, but it's pittance to being out of business," Boyd says.

Still, the best way time to plan for a disaster is before it happens. Diane McClain, a senior analyst with St. Charles, Mo., consulting firm Newberry Group, says the same problem that existed before 9/11 still plagues small-business owners: lack of time.

"You spend all day running your business, do you have time to worry about all this disaster crap?" says McClain, who often gives seminars on disaster recovery and business-continuity planning. Small businesses have gotten better at reacting to disaster, but still aren't doing enough prep. "Katrina, 9/11, or whatever disaster du jour does not necessarily mean small businesses have changed the way they do things," she says.

Small-business owners interested in testing their readiness to handle disaster can take a 10-question self-assessment quiz developed by the Institute for Business & Home Safety, a Tampa, Fla., nonprofit group supported by the insurance industry. IBHS offers a free disaster-planning toolkit for small businesses on their site.