By Ivette Mayo – Your POWER Advocate
Here in southeast Texas, we experienced the fury of Hurricane Harvey when it made landfall August 25, 2017. Resulting in what’s possibly is the worst disaster Texas has ever experienced. They say the recovery will take years. Everyone in Harvey’s path felt the impact instantly in their homes, communities and at work. Small-business owners will face many challenges in rebuilding. Taking the right immediate POWER steps post any disaster can make all the difference. About a quarter of small businesses will not reopen following a major disaster, according to the Institute for Business and Home Safety. The Federal Emergency Management Agency (FEMA) said this rate could be as high as 40 percent. Entrepreneurs often overlook preparation for these rare events and focus instead on more pressing daily details, but taking POWER steps to prepare for the unthinkable can be the difference between surviving and failing. Here are POWER steps to consider now as you gear up to recoup or minimize losses to start your recovery process.
Check out SBA site
This is an immediate POWER step that connects you to valuable resources. The Small Business Administration will release a list of local resource partners who can help business owners. The resources will be available here, along with information regarding the SBA disaster loan program.
Call your insurance agent
Contact your insurance agent as soon as you can. The Insurance Information Institute has a step-by-step guide to help you prepare for the claims process and the adjuster’s visit. Have your policy number handy when you call. It’s crucial you file an insurance claim to document that a disaster occurred.
Organize your records
Gather and organize your business records, which will be helpful when dealing with your insurance agent or applying for disaster relief funding. If your records were destroyed, there are ways to reconstruct them.
- Collecting Invoices dating back at least a year
- Bank statements that can be used to track deposits and determine sales revenue
- Last year’s federal and state tax returns
- Purchase agreement, if you purchased your business from a broker
- Business contracts
Research recovery financing
The SBA’s disaster loan program provides low-interest loans to businesses of all sizes, private nonprofit organizations, homeowners and renters. As a business, you may apply for up to $2 million in assistance, which will be made up of a business physical disaster loan that covers real estate, inventories, supplies, machinery and equipment, an economic injury disaster loan to cover working capital needs, or a combination. The SBA tries to make a decision on each application within two to three weeks. Applications are reviewed on a first-come, first-served basis, so submit yours as soon as you can.
Watch out for scams
Ask for identification and do your due diligence before working with contractors, business financial lenders or anyone offering assistance. Companies issue employees official photo IDs. Remember, there are not fees/charges associated for any services provided through any disaster assistance program.
Reach out to current customer list
Even through you have been impacted by the disaster, don’t assume your customers have been as well. Reaching out serves three purposes, one it gives you the chance to confirm your customer’s situation. Secondly, it gives you a chance to determine if you can continue to provide your products/services at the same level. And thirdly, this will gives you the chance to identify if you can offer additional value by increasing your service levels. A short email stating you are ready to serve can minimize losses.
Use Social Media to communicate
The POWER of Social Media continues to prove its strength. Reach out to your network as soon as possible to share that you are open and ready to serve makes sense. By canvassing your network, you continue to build a sense of community and it stabilizes your framework for the future. Through social media you continue to engage and build value. Remember social media increasingly play a pivotal role in disaster response, recovery and engagement.
The next disaster
Be it a natural disaster like a tornado or hurricane, equipment failure or even the death or illness of a key business owner or employee, it’s smart to be prepared for the worst.
Here are three POWER steps to prepare your small business for another disaster, an emergency situation or a major slowdown.
- Create an emergency fund – An emergency fund is money you’ve socked away to handle the unexpected. Instead of having to take drastic measures, such as laying off employees or paying vendors late, you can tap into these funds and replenish them when business gets back to normal. Aim to stash away at least 6 to 12 months of expenses.
- Open a business line of credit – Of course, not every small business — especially startups with limited operating histories — will be able to stash away 6 to 12 months of expenses. For additional access to capital, a business line of credit could come in handy while you build up your cash reserves.
- Make sure you’re properly insured – Small businesses can be protected from losses by the right types and amounts of insurance coverage, which can vary according to the type and size of each business. For example, if you own a building and equipment, you’re more likely to benefit from property insurance than would a business that’s run from a home office. Remember, there should be enough in coverage to replace the property owned by the business and cover the operating expenses of your business in the event you become disabled, plus cover the value of your ownership in the company.
“Not only does your business need to be able to survive a disastrous storm, but you need to have a strategy for when you are rebuilding your business!”
Creating POWERFUL and IMPACTFUL Results!
Ivette Mayo is the President of Yo Soy I AM, LLC, an award winning entrepreneur, business strategist, leadership expert and author. Visit her website www.ivettemayo.com Ivette is always ready to encourage, empower and support you to be POWERFUL in all that you do! Follow Ivette Mayo on LinkedIn, Facebook, Instagram and Twitter
To schedule your one-on-one session with Ivette, simply send an email to [email protected]