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Ask the Experts
Preparing for the Unexpected
Being your own boss has its rewards. You get to make the rules and reap the profits. But there’s also a downside. Things will happen that are outside of your control and, as owner, you will have to address them. Are you up for the challenge? Read on.
Disaster Readiness and Recovery
Disasters can happen anytime, anywhere and they don’t have to be as devastating as a flood or a fire to seriously impact your business. Suppose your power goes out for half a day? Or 25% of your employees come down with the flu in a single week? And if the disaster is a major one — say a Category 3 hurricane — the destruction can be catastrophic. An estimated 25% of businesses affected by such an event never reopen at all.
While natural disasters cannot be prevented, steps can be taken in advance to lessen their effects. And the time to prepare is now.
A bridge loan helped Natubhai Patel fix the damages and replace food that was lost after Hurricane Irma. | Photo: Michael Price
I’ve never personally experienced a hurricane, but I’ve seen the damage these storms can do. What steps can I take right now to prepare for the possibility of a catastrophic storm or other natural disaster and the disruption of business it would cause?
While we are powerless to prevent hurricanes and other catastrophic natural events or man-made disasters, a proactive disaster management plan can mitigate their effects and help speed your return to normal operations. Here are some topics to consider in developing your plan:
Identify potential hazards. In addition to the natural events most likely to impact Florida – hurricanes, floods and sinkholes – you should consider the likelihood of man-made disasters, such as fire, toxic chemical spills, civil unrest, vandalism and terrorism. Even if your business is not directly affected, these events could disrupt your utilities and supply chains.
Create an operational contingency plan. Could you operate out of a nearby rented office space, storefront or your own home? Perhaps you could share space with a supplier. Determine what equipment and other resources will be needed to continue operations. Back up computer files and store them off-site or on the cloud.
Ensure the safety of employees and customers. Develop an evacuation plan that includes access to shelters, hospitals and other emergency services. Keep emergency telephone numbers clearly posted, and maintain up-to-date emergency contact and essential medical information for all employees.
Take a safety inventory. Regularly clean and test smoke detectors and change batteries at least once a year. Have several well-stocked first-aid kits on hand; make sure all fire extinguishers are fully charged. Keep a supply of all types of batteries used in your business and consider purchasing a portable generator for emergency power.
Review your business insurance coverage. It should be enough to get your business back in operation at the earliest possible date and cover the replacement cost of buildings, contents and essential facilities. Additional coverages to consider include: windstorm, flood and business interruption.
Answer provided by Gray Poehler
Business Counselor, SCORE, Naples Chapter
I’ve heard that the claims process following a hurricane can take a long time and that funds aren’t immediately available. So what do I do in the meantime? How can I reopen my business and continue to pay my employees?
I understand your concerns about the claims process and ready availability of funds, but here’s the good news. Following a natural disaster in Florida, SBDCs all across the state serve as the business community’s primary contact for processing and submitting the paperwork for Florida Small Business Emergency Bridge Loans. For a business physically or economically impacted by a disaster, a bridge loan is the “first step” to receiving short-term, interest-free funds. As its name implies, the bridge loan provides quick access to working capital by helping a business bridge the gap from time of impact to the time when longer-term solutions, such as sufficient profits, federal disaster assistance or insurance proceeds, become available. Activated by the governor following a disaster, this program is funded by the state of Florida and it is a loan, not a grant.
To further allay your concerns, let me give you an example of how a bridge loan worked for one of our clients. After Hurricane Irma roared through Jensen Beach in September 2017, convenience store owner Natubhai Patel returned to find a soggy mess at his Seabreeze Food Store. The roof had sprung a leak, there was no refrigeration, and every bit of food was ruined. Patel turned to the Florida SBDC at Indian River State College for help in securing a bridge loan. “The loan helped us fix the damages and replace all the food that was lost,” he says.
Answer provided by Katherine Culhane
Associate Director, Florida SBDC at Indian River State College
On-site recovery assistance
In times of disaster, the Florida SBDC Network deploys its Mobile Assistance Centers into communities with greatest need so that affected business owners can receive on-site assistance close at hand. These assistance centers are staffed by Florida SBDC consultants who can help business owners recover more quickly by answering questions, creating short-term recovery plans and assisting with the completion of loan applications.
Find Back-Up Suppliers Now!
Don’t wait until a storm is bearing down to cultivate relationships with back-up suppliers; do it now! In the aftermath of a disaster, everyone is looking for help. To avoid being put on a wait list for repairs, become a “preferred customer” by building a network of reliable repair services and suppliers you can call on anytime.
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