By James Chittenden
Whether a shutdown, civil unrest, terrorism, or a natural disaster, there are huge rewards to a business continuity plan. Get back up and running fast after emergencies. Here is how.
If you live in a disaster-prone area, invest in a little preparation.
For example, anyone who has spent years on the coast of the Atlantic Ocean or the Gulf of Mexico is likely accustomed to hurricanes. Same as in California, where the threat of earthquakes is always present.
Access to money
Before, during, or after a disaster, a state of emergency may be declared for select counties or even an entire state. This means that federally-backed low-interest loans are made available for disaster recovery. In some cases, a state may offer zero-interest loans to affected businesses. For lines of credit, disaster loans, or other working capital, see your options here.
For immigrant-owned businesses or credit-challenged businesses, loan options are available here.
These loans can serve as bridge financing until an insurance claim is paid. The money can help a business survive until profits are restored to a level where the loan can be repaid.
This is not free money. You must qualify for it like other bank loans, and you must pay it back. A loan committee evaluates your application. And if you want the money fast, have a few things ready.
Business continuity. Get back up and running fast after an emergency. Is there a hurricane coming? Get a waterproof bag, fill it with the following, and evacuate.
Your Checklist
- Three years of income statements, balance sheets, and cash flow statements. If you have not been in business that long, get what you can. With these, you can apply for disaster loans.
- Insurance policies. You will want to have them handy so that you can quickly file a claim. Additionally, the policies can be pledged as loan collateral. Assets, inventory, furniture and equipment are all insurable, as is business interruption.
- Have adequate insurance. If a hurricane is heading your way, insurance will not be available for purchase 72 hours or less before expected landfall. However, you can insure almost anything; inventory, loss of revenue, loss of key personnel, fire, flood, and the list goes on. If you are unsure of what insurance to buy, get opinions from at least three insurance agents. Why three? Remember, insurance agents work on commission, so they have a vested interest in selling you as much insurance as possible. Get information from three different sources and insure according to what makes sense for you. Get fast, free quotes here. Your most important customer lists, employee data, and other vital records on a portable drive.
- Bank statements.
- Finally, if you have a physical location, prepare letters authorizing trusted employees access to your premises. Laminate them and give them to these employees. That way, if authorities have an area cordoned off, they may allow someone access if they can prove they are authorized to be there.
While many of these records may be cloud-based, don’t assume that secure, or even functional Wi-Fi will be available when you get back. It may not be. For that reason, it is best to have the physical documents.
The rewards
Imagine being the only business open after a disaster; providing supplies, food and other needs. Imagine the lines at your door.
In 2004, Hurricane Charley was churning northeast through the Gulf of Mexico, along the Florida coast. Forecasting models predicted a direct hit around Tampa. Businesses and government offices closed, evacuation orders were issued, and Tampa Bay prepared for the worst.
Then, hours before the scheduled landfall, upper level steering currents turned the trajectory of Hurricane Charley sharply to the east. It made landfall near Ft Myers, almost 200 miles south of Tampa. Tampa’s effects from the hurricane were wind and heavy rain, but little damage otherwise.
Businesses that were closed that night remained closed. A few braved the storm. A local gyro shop made the news for staying open, with long lines stretching down the block. There was nowhere else available to eat that night. In that case, the risk of staying open worked out for them.
Do it!
Business continuity. Get back up and running after an emergency. Are you ready? Take this simple and free assessment offered by the American Red Cross. There are simple things you can do to ensure your readiness.
And finally…
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