Future-Proof Your Business in the Wake of a Natural Disaster

Keeping your business going after an extreme weather event is not easy, but these tips can help your company's chances of longevity after the storm passes.
Writer/Author/Publisher/Speaker, Garden Guides Press
August 31, 2017

Although Misty Starks' Houston-based companies, 3B Resources Group Public Relations and Misty Blue Media, serve clients nationally, many of her customers have been affected by Hurricane Harvey.

“Each of my companies are business-to-business, so when my customer's companies are interrupted, so are mine," says Starks, who had to evacuate her home office during the hurricane.

“Since the hurricane hit, I've been proactive in communicating with my clients in order to manage expectations and address any uncertainties," she says. "This storm has highlighted vulnerabilities in my businesses, and I'm grateful for that. When it's all said and done, I'll be a better business woman on the other side."

Five years on the other side of Hurricane Sandy that hit New York City in October 2012, Lynne Lambert agrees that it's possible to future-proof your business after a natural disaster.

“My company survived losing more than half of our inventory in Hurricane Sandy," says the owner of NYC Subway Line, a clothing and apparel line featuring NYC imagery. “The public warehouse we used to store our merchandise was just feet from the Gowanus Canal. With no heat or electricity in the warehouse, my husband, son and I waded through toxic water to salvage what had not been damaged by the storm and resulting flooding."

Natural Disasters Can Negatively Affect Any Business

According to FEMA, almost 40 percent of small businesses never reopen their doors following a disaster. Much of this has to do with the fact that many businesses are already vulnerable, believes Michelle Pippin, founder of Women Who WOW, a national and international association of women entrepreneurs. She is also located in hurricane territory on the East Coast.

Don't forget that your employees are also going through a lot. Be sensitive to their needs beyond your business, and offer help where possible.

—Misty Starks, owner, Misty Blue Media

“Many small businesses are operating on razor-thin profit margins," says Pippin. “When you throw in a natural disaster, like what Texas just experienced, you've got a problem that crosses all industry lines. Retail establishments see disappointing sales numbers and specialists face canceled appointments."

5 Steps to Future-Proof Your Business

With some quick thinking and action following an extreme weather event, you can minimize the effects to your company. Help future-proof your business—and avoid becoming a statistic by keeping the following five post-natural disaster tips in mind.

1. Ensure that documents and key information are backed up.

“Future-proof your business by making sure your important files are saved to the cloud so they can be accessed from anywhere," says Starks. “In an evacuation situation, you may not have your business computer at your disposal. Having important information in the cloud allows for business continuity."

If you choose not to use cloud storage, ensure that copies of your important documentation are stored offsite, agrees Robin Lee Allen, managing partner for Esperance Private Equity, an investment fund manager specializing in private equity transactions. “Keep copies of legal and financial documents in an off-site safe deposit box or vault. Redundancy in record keeping is better than no records."

Insurance will help with physical assets, but lost information can destroy years of hard work, agrees Roman Zrazhevskiy, founder and CEO of Ready To Go Survival, a retail brand specializing in personalized emergency preparedness. “If you have sufficient notice and conditions are safe, relocate your most valuable assets to a safe place or higher ground. Renting a truck and a warehouse at a safe location could minimize potential downtime."

If you don't have backup files and your data seems to be lost, look into electronic restoration, advises Jay Shelton, senior vice president of executive risk at Assurance, an independent insurance agency in Chicago. “It's amazing what can be recovered from a hard drive that appears damaged."

2. Contact your insurance provider ASAP.

“Notify your insurance provider at the first sign of damage," advises Zrazhevskiy. “Waiting until later puts you at risk of being at the end of the line for a payout."

Future-proof your business by communicating as soon as possible with your insurance agent and take their direction on how to proceed, agrees Lambert, who had marine insurance to protect her goods when they were on the water from China. “It turns out that insurance policy had a $100,000 in-warehouse component to it, which went a long way to making us whole again. If you're worried about what insurance reimbursement you may or may not get, hire an independent adjuster."

Keep good records for the insurance company, advises Starks. “Be sure to document any damage to equipment and your office to turn over to your business insurance agent, and keep track of any interruption of income. Promptly contact your business insurance agent to go over your coverage and to walk through the process of filing a claim."

3. Check on employees and vendors.

“Immediately after a disaster, the first thing I advise is checking on the people involved in your business," suggests Lee Allen. “From a business and economic standpoint, human capital is by far the most valuable. Ensuring that your employees are as personally secure as possible allows you to focus on business continuity plans."

Starks agrees. “Don't forget that your employees are also going through a lot. Be sensitive to their needs beyond your business, and offer help where possible. Being an understanding boss goes a long way toward employee retention."

Shelton suggests staying visible and in direct communication with your employees after a natural disaster. “Inform employees of who's responsible for certain aspects of the business's recovery and how your leadership team can be reached. If possible, arrange a meeting with employees to review your post-disaster plans. And make sure to allow time for employees to tend to personal affairs."

In addition, future-proof your business by reassuring customers. “In uncertain times, it's important to communicate as much as possible with clients in order to alleviate any anxiety about your business's ability to perform services," says Starks.

“As soon as possible, reach out to vendors to whom you owe money," adds Lambert. “Let them know that they will be paid, but ask them to please extend their terms to help you until your business gets back on its feet. If you've been a loyal customer and paid on time, this reassurance is likely to be met with a positive and helpful response."

4. Apply for financial assistance.

While it's a good idea to apply for financial assistance for your business through the Small Business Administration (SBA) and FEMA, Lambert suggests checking for other opportunities first.

“I got an SBA loan to replace the rest of our inventory not covered by insurance, but I missed out on a grant that would have greatly helped if I'd known about it. Before taking out any loans, see if there are any regional, city, state or federal low or no interest loans or grants available for businesses in your area."

5. Reach out for help.

Avoid isolating yourself after a natural disaster.

“Contact fellow entrepreneurs if you're in need," says Starks. “Have a list of contractors and freelancers in areas outside your immediate city to serve as backup for employees, who are also displaced. Tap into your professional network to put a few people on standby who can be available to help your business, if necessary."

Most importantly, future-proof your business by giving yourself and your business time. “After a disaster, it takes time to get back to normal," says Starks. “Give yourself a chance to get back on your feet, and be honest with yourself and your clients about your recovery."

Photo: Getty Images
Writer/Author/Publisher/Speaker, Garden Guides Press