When a disaster hits a community it can be devastating. For business owners, it can be a doubly difficult. At the same time they are facing the loss of their property and ensuring the safety of their families during the crisis, they also face another set of decisions that affect anyone involved in the business, as well as its customers and community. Feeling responsible for so many other individuals adds another layer of anxiety for business owners at an already stressful time.
This information will help business owners make decisions about the future of their company. The SBDC and University of Missouri Extension’s Business Development Program can assist in many ways, particularly in partnership with area lenders, technology experts, state departments and federal agencies, such as the U.S. Small Business Administration.
Download our Disaster Recovery Guide for Small Businesses.
Where to begin
As you begin to rebuild your life and your business following a disaster, knowing where to start can be extremely difficult. Here are some steps that can help you decide where to begin.
Reconnect
Obtain a working phone line. You need a way to receive calls and reach out to family, friends and customers. If you have access to a cell phone, get your business number forwarded to the cell number. Having a way to connect via phone will also help with the natural feelings of isolation you may feel following a disaster.
If your business location was involved in the disaster, you may have lost computer equipment and the ability to connect via the Internet and email. One immediate way to handle this is to ensure that you can receive email and have web access through your phone. Or find a local business center with Internet access. During many recent disasters, the most up-to-date information has been available through Facebook, Twitter and other social media.
As you begin to clean, repair and rebuild, hook up a television so you have some sense of connection to the outside world. At the very least, listen to a radio so you can hear the latest updates on weather, the community and local assistance efforts.
Break the task down
Attempting to do everything at once will feel overwhelming. As you stand in a damaged store or factory, the amount of work before you can easily make you feel powerless and defeated. Start by breaking the work down into manageable chunks. Each completed task will give you confidence and strength for the next chore. Start with smaller, more realistic steps, and build on that, applauding yourself each time you complete a task. Before you know it, you will have accomplished a great deal.
Reach out and communicate
In the case of suppliers, remember that it's in their best interest to get you back in business as soon as possible, so they will be willing to assist. Place orders for replacement merchandise and materials. Request replacement displays and promotional materials. And talk about payments; don't avoid the issue. Confront the situation, and be forthcoming about what you need and what you can do, particularly since you will likely have insurance claims pending. The key is to communicate. Most suppliers can deal with any circumstance as long as they know up front what to expect.
Deal with finances
It may be the last thing you want to think about immediately following a disaster, but you need to face it head-on. Cash flow is going to be a big issue, particularly in the short term. Make the call to your bank and anywhere you have credit, and let them know what has happened. Most of the time they will be incredibly supportive by deferring repayments. Regardless of whether you need this right now or not, it is good to know that you have it available. If you take credit cards in your business, obtain a manual machine so you can immediately process credit card payments. You may experience power outages as you rebuild, and down time can mean lost sales.
Talk to the IRS
Taxes may be the last thing on your mind, but the IRS can be a very good source of assistance and support. They may even relieve some of your financial worries by arranging for a revised tax payment plan in light of your situation. Since you have many other financial considerations now, particularly the cost of rebuilding, handling creditors and paying suppliers, removing the tax worry can make other decisions much more manageable. Sure, you will eventually need to pay, but in the most disruptive time of the crisis when you are just trying to get the doors open again, having dealt with the tax issue can give you some breathing room.
Keep your staff informed
With a business closed and no money coming in, employees can become understandably anxious about their income and the future of their job. This is the time to be completely honest with them as soon as you can. In many cases, employees with full information will dive in to help you in ways you may not have expected. Frequently, government assistance agencies will provide some funding for salaries during a rebuilding period. Check with your local relief organizations to see what is available.
Take photos and keep records
Our natural inclination when confronted with the mess and destruction after a storm is just to bulldoze it all away. However, it's important to record the damage done to the facility and to your inventory. Your insurance carrier may require evidence of the destruction. Keep a journal of what you find, what is damaged and how badly, what you discard and when. Keep a few examples of badly damaged items to show your adjuster the extent and severity of the destruction.
Take care of yourself
Remember that your physical and emotional defenses are down. You are under extreme emotional distress, and you are working long hours to get the business re-established. You are in a marathon now, and you must do all you can to avoid illness and injury. Drink lots of water, eat as well as you can and, although you will not want to or feel that you should, rest and sleep as often as you can.
Talk to your customers
Try to find the upside and see the opportunity
Avoiding scams
First rule of thumb: If you suspect anyone of fraudulent activities, call the Missouri Attorney General's Consumer Protection Office at 800-392-8222 consumer.help@ago.mo.gov or call your local law enforcement agency.
- FEMA does not charge fees to apply for assistance or to receive it.
- Neither FEMA nor the SBA charges for property damage inspections.
- FEMA does not ask for your Social Security number, bank account number or other sensitive information.
- Government workers will never ask you for a fee or payment of any kind. Look for photos IDs. Be wary of anyone who says he represents a governmental agency and asks for money.
- If you're unsure about the authenticity of a FEMA or SBA representative, call the FEMA disaster assistance hotline at 800-621-FEMA (3362).
- Do not be pressured into contracting or donating by anyone. Reputable organizations will honor your request to take time in making a decision.
- Guard your Social Security number, account numbers, PINs and other personal information carefully. Identity theft can be a serious problem in the midst of the confusion following a disaster.
Arraging for repairs
- Do not allow a contractor, utility company or inspector onto your property without verifying their identity.
- Be wary of anyone who promises you he can speed up the clean-up, repair, insurance, building permit or disaster assistance process.
- Be wary of anyone going door to door through a disaster area in an unmarked vehicle.
- To avoid price gouging, get three written estimates for repair work. If you have any doubts about the credibility of the contractor with whom you are dealing, call the local Better Business Bureau or chamber of commerce.
- Ask for references, and call them.
- Ask for proof of insurance, such as liability or worker's compensation.
- Be cautious of contractors who claim to be state or FEMA certified. Neither the state nor FEMA certifies or endorses contractors.
- Before work begins, make sure you get a written contract detailing all the work to be performed, the costs, a projected completion date and how to negotiate changes and settle disputes. Do not make your final payment until all of the work is completed to your satisfaction.
- It may take a bit longer for your insurance carrier to settle your claim after a major disaster. If you have questions, call the Missouri Department of Insurance at 573-751-4126 or the department's insurance consumer hotline at 800-726-7390.
- Make sure the contract clearly states who will obtain the necessary permits. Consider having a lawyer review the contract if substantial costs are involved. Keep a copy of the signed contract.
- If the contractor provides any guarantees, they should be written into the contract clearly, stating what is guaranteed, who is responsible for the guarantee and how long the guarantee is valid.
- Pay only by check or credit card. A reasonable down payment (no more than one-third of the total cost) may be required to buy materials for some projects, but don't pay anything without a signed contract.
Donations to charities
Use caution when approached for donations to relief organizations. Only contribute to those groups willing to provide written information about their activities.
- Avoid cash donations. Make checks payable to the organization — not the individual.
- Do not respond to telemarketer requests for donations.
- If in doubt, contact the organization soliciting the donation, and ask if the person with whom you spoke is truly an employee or volunteer.
GuideStar is a great resource for checking into the legitimacy of a non-profit organization.
Effective employee communication in times of crisis
Helping your employees through a crisis
Here are some steps you can take to help your employees through a difficult time:
Discuss the disaster openly
- Acknowledge that it happened and that it was, indeed, catastrophic.
- Be sure you know the facts of the situation in terms of what happened and what will happen next. But don't theorize. Only report the facts as you know them.
- Speak frankly. Avoid euphemisms. Tell it like it is. If someone died, you need to discuss it.
- State that you know the tragedy has an impact on everyone, that everyone will experience it differently and that it will take individuals varying lengths of time to recover.
- Share your story. If you are personally touched by the disaster, speak openly about it.
Demonstrate caring leadership
Help through the transition
Be very proactive in your leadership. Be present. Be reliable. Be accessible. Be realistic.
If employees need personal help of an emotional nature, help them find the resources they need.
Recovering from the physical damage to your business
And when in doubt, throw it out!
- Note the time the outage begins.
- Discontinue all cooking operations.
- Don't put any hot food in the refrigerator or freezer. Doing so will rapidly raise the temperature inside the refrigerator or freezer and may make even more food unusable.
- Discard anything in the process of being cooked, but which have not yet reached the final cooking temperature.
- Maintain these hot, potentially hazardous food at 140 F or above using canned heat or other heating devices in a chafing dish.
- Use ice or ice baths to rapidly cool small batches of hot food.
- Discard any potentially hazardous food that has been above 41 F for four hours or more, reached a temperature of 45 F or higher for any length of time or has an unusual color, odor or texture.
- Add bags of ice or dry ice to the freezer if it appears the power will be off for an extended time. You can safely re-freeze thawed foods that still contain ice crystals and are at 41 F or less.
This guide from Foodsafety.gov can help you determine which specific foods to keep and which to discard.
Remediation and reconstruction; returning to normal
Making a plan to survive a business disaster
Developing a plan can seem overwhelming, but here are some basic questions to help get you started.
- What types of disaster might we experience?
- What parts of our business need to be operational first following a shutdown?
- Do we have a plan for relocation? Where could we go, and for how long?
- What are our employees' roles in disaster recovery?
- How will we communicate with one another if phone and email are not available?
- What kinds of agreements do we have with our computer and internet providers?
- Will our current business insurance cover our needs following a disaster, or do we need to update our coverage?
- How can we finance our recovery expenses? Do we have our financial records backed up off-site so that we can have the information we need to apply for additional financing?
- What process do we have for backing up current information? Do we need another server off-site? How often should we back up our information?
- How will we handle telephone calls if our site is disabled?
- How will we track orders if our system is down?
- Make a back-up of all of your files, programs, email messages, websites, databases and contacts immediately.
- Back up all laptops as well, even those that are with off-site employees.
- Move all of your back-up data to an off-site location.
- Make plans now to back up all of your information at the very least weekly. Daily is better.
- Keep back-up hardware off-site if you can. Even a few desktop and laptop computers that you can get to in an emergency will make business restoration easier.
- Keep a record of all of your operating systems and applications, including version numbers, license numbers and configuration details, and how to run those programs and applications in an emergency. Make a copy and store it off-site.
- Ensure that more than one person knows the whereabouts of your back-up data and how to access it.
- Ask your IT vendors about their response plan in the event of a disaster.
- Create a disaster manual that provides instructions regarding where you can establish an alternate location and from whom you can get equipment and supplies. Include all of the contact information for employees, suppliers, insurance agents, emergency management personnel, and telephone and Internet providers.