If the COVID-19 pandemic has taught us anything, it’s this: catastrophe happens. As a business owner, you can’t necessarily predict or prevent a disaster, but you can prepare for one. And as a result, you may even be able to fend off some of its worst effects.
Disasters come in many forms and often with little warning. Big ones — hurricanes, pandemics, a disgruntled employee with a gun — get the greatest attention. But a small one — like simply losing power for a day or two — can wreak havoc on a workplace too.
Fortunately, we Floridians have a leg up when it comes to disasters. For six months of every year, we live with the real possibility of having to face down a hurricane and, as a result, we’ve learned to anticipate disaster and prepare for it. Orders to stock up and stay at home aren’t necessarily seen as restrictive; they’re just common sense.
Preparing for Disaster
As a business owner, there’s very little you can do to prevent a hurricane or pandemic. But you can certainly mitigate their effects on your business by taking proactive steps in advance. Here’s a list of actions you can take well ahead of launching your business:
Know the potential hazards you might face. Up until 2020, business owners in Florida were typically subject to two primary hazards: the natural kind, which includes hurricanes, floods, lightning strikes and sinkholes; and the man-made kind, such as fire, toxic chemical spills, civil unrest, gun violence, vandalism and terrorism. But in 2020, along with these, business owners were introduced to a brand new and potentially even more catastrophic hazard — a highly contagious virus, the likes of which we’d never known before. In a matter of weeks, it spread like wildfire from country to country across the world until even the United States, which had largely escaped the other so-called “worldwide” pandemics of recent years, fell victim to COVID-19. And not only were business owners affected, so too were their clients/customers and supply chains.
Create a contingency plan. What if a hurricane blows the roof off your workplace or it’s leveled altogether? Could you operate out of a nearby warehouse? A storefront? Your own garage? What if the culprit that shuts down your operation is a highly contagious airborne disease? Could your employees work from their individual homes? How would you communicate with customers? Suppliers? One another? As individual states began to issue stay-at-home orders in March 2020, thousands of companies across the U.S. scrambled to develop contingency plans on the fly. Now, as you work toward launching a business of your own, you need to create just such a plan for your people and processes. And don’t forget to back up all computer files and store them off-site or on the cloud so that you have ready access.
Protect your most valuable assets – the people you employ. Be ready to vacate your premises at a moment’s notice. In preparation for a natural or man-made disaster, develop an evacuation plan that includes access to shelters, hospitals and other emergency services. Post emergency phone numbers in prominent places. Maintain up-to-date emergency contact and essential medical information for all employees. If, due to a pandemic, you must send your employees home to work, try to replicate a “9-to-5 day-in-the office” if possible, but keep in mind that, in addition to work responsibilities, your employees may have added burdens such as home-schooling their children or caring for elderly family members. Be flexible.
Conduct a safety inventory. Regularly clean and test protective devices such as smoke detectors and fire alarms on premises; change batteries at least once a year. Have well-stocked first-aid kits on hand. Make sure all fire extinguishers are operational and fully charged. Keep a ready supply of all types of batteries used in your business. Consider purchasing a portable generator to provide emergency power.
Review your insurance coverage now. Do you have enough coverage to get your business back in operation at the earliest possible date? Does your policy cover the replacement cost of buildings, contents and essential facilities? Are you insured against wind, floods, business interruptions? If not, maybe you should be.
Pre-plan for repairs. Don’t wait until a storm or pandemic has passed to start shopping for repairs; become a “preferred customer” now. Build a network of reliable repair services and suppliers well before you need them to avoid being placed on a lengthy wait list when you do.
Recovering in the Aftermath
Once the storm passes or the virus is contained, it’s only natural that you’d be anxious to bring your employees back to work and resume normal operations ASAP. But then your insurance adjuster says it could be weeks before your claim is processed. So where will you find money in the meantime to make necessary repairs and pay your staff?
Look to the Florida SBDC Network for help. In times of disaster, SBDCs across Florida serve as the business community’s primary contact for processing and submitting the paperwork for Florida Small Business Emergency Bridge Loans. If your business has been physically or economically impacted by a hurricane, pandemic or other disaster, a bridge loan is your “first step” to receiving short-term, interest-free funds.
Just as its name implies, the bridge loan gives you quick access to working capital by helping your 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. Bridge loans are activated by Florida’s governor following a disaster and funded by the state of Florida. Keep in mind, however, that just as its name implies, this is a loan, not a grant. You will eventually have to pay the money back.
COVID-19 Recovery Assistance
Applications for the Economic Injury Disaster Loan (EIDL) will be accepted through December 31, 2021. EIDLs provide six months of working capital, up to a maximum of $150,000, to meet financial obligations and operating expenses that could have been met had the disaster not occurred, including continuation of health care benefits, rent, utilities and fixed debt payments.
Cyberattacks against big-name companies garner a lot of media attention, but small businesses might actually be in greater peril. According to the most recent Verizon Business Data Breach Investigations Report (DBIR), 28% of data breaches across the U.S. in 2020 involved small businesses. Web applications and miscellaneous errors were the top patterns criminals used to attack small businesses, and 83% of their activity was finance related. Even more disturbing, 52% of compromised data was mostly made up of credentials — yours or your customers.
Bottom line: To avoid becoming a victim of cybercrime, start making high-tech security a top priority. Learn all you can about cybersecurity and take preventive measures now. And if you still lack confidence in your digital security capabilities, hire an expert; with digital incidents costing businesses an average of just under $200,000 per incident, it will be money well spent.
Insurance is available to protect against almost any business risk. Consult with an insurance agent to determine which of the following types of insurance you will need, then compare terms and prices to decide what’s right for you.
FOR YOUR PROPERTY
- General Liability Protects a business against financial loss resulting from bodily injury, property damage, medical expenses, libel, slander, lawsuits and settlement bonds or judgments.
- Product Liability Protects against financial loss resulting from a defective product that causes injury or bodily harm.
- Professional Liability Protects against financial loss resulting from malpractice, errors and negligence.
- Commercial Property Protects against loss and damage of company property due to fire, smoke, wind and hailstorms, civil disobedience, vandalism and other such events.
- Home-Based Business Insurance A rider added to your homeowners insurance that offers some protection for business equipment and liability coverage for third-party injuries.
- Business Owners Policy Combines all of the typical coverage options in a single package at a reduced price; generally available only to businesses with fewer than 100 employees.
- General Liability Flood Property insurance does not cover damage from floodwaters, whether from rivers, lakes or oceans; however, business owners may insure their building and contents for up to $500,000 each through the federal government’s National Flood Insurance Program (NFIP).
- Windstorm Available through Citizens Property Insurance Corp., the state-created insurance provider, or private insurers; type of construction, size, location and proximity to water determine cost and availability.
- Business Interruption Pays ongoing expenses such as rent, utilities and, in some cases, payroll when a business must close due to an insured property loss – i.e., in the aftermath of a hurricane.
FOR YOUR PEOPLE
- Directors and Officers Liability Protects the company and individual executives should employees, shareholders, government agencies and/or others sue directors and officers over financial losses due to alleged company mismanagement.
- Key Employee Protects a business following the death of an individual considered vital to the firm’s success. Similar to a life insurance policy, except the death benefit is paid to the company rather than to the individual’s family.
- Workers' Compensation Florida law requires employers with four or more full- or part-time employees to have workers’ compensation coverage for their employees. Sole proprietors and partners are not considered employees; corporate officers are, unless exempt.
FOR YOUR IDEAS
Intangible assets Your company’s reputation, name recognition, know-how and/or creative ideas have no physical existence, but they have commercial value and should be protected by one of the following:
Patents A patent is a property right granted by the U.S. Patent and Trademark Office to an inventor to exclude others from making, using or selling the invention without permission for a specified period of time. Visit www.uspto.gov for information.
Trademarks Words, symbols, names, internet domain names, packaging and labeling that distinguish one company’s products from another may be registered as trademarks through the U.S. Patent and Trademark Office or, for more limited state protection, through the Florida Department of State, Division of Corporations.
Copyrights An author’s exclusive right to use his or her original writing, musical compositions, artistic designs and other works of expression is automatic when a work is created and lasts 70 years after death. Official registration is optional in most cases; for protection, simply add the word “copyright” or © symbol, first year of publication and name of copyright owner(s) at the top of the page.