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Can your business survive a disaster?

Small businesses are more likely to struggle than their larger counterparts when it comes to overcoming disasters, but the good news is that with some careful preparation, your business can get back on its feet again.


“In almost all cases of disaster, what’s really highlighted are the deficiencies in risk management plans. The thing that makes small businesses successful is their optimism and belief in themselves to be able to overcome challenges, but sometimes that works to their detriment when they don’t factor in what can go wrong,” said David Hechter, director of Interface Financial Group.

Some of the most important elements to consider when preparing your business for if or when disaster strikes include signing up for the appropriate level of insurance, ensuring your physical records are stored electronically and that you have a financial safety net which you can draw upon, such as a line of credit.

According to Hechter, small businesses find it harder to cope after a disaster as they are often dependent on the owner, who often finds it a challenge juggling priorities at the best of times. However, in a disaster, that becomes exacerbated.

“They’re also more likely to have fewer customers, so if one particular customer has a problem, it slows down a payment or not able to make one, that then can unsettle the business because they have fewer customers to begin with,” he told Smarter Business Ideas.

When disaster strikes, some of the consequences for small businesses affect their basic ability to run at all, such as being able to access their premises and systems. Their supply lines  are also often affected, as road and rail transport might be knocked out temporarily. In addition to that, their customers’ businesses can also be impacted in a similar way, so they may struggle to pay invoices.

Here are some tips from Interface Financial Group on how your business can survive in a disaster:

1. Speak with your insurance broker or provider about what can be claimed based on the damage to both physical property or if there is business interruption as part of the policy.

2. Always back up your records and keep them in a safe place. Web storage is a good option.

4. If you have to relocate your business in a hurry, plan where to and how.

5. What if your suppliers are unable to deliver? Create alternative supply lines to keep your business running.

6. Make sure as a business owner you know who does what and what coverage you have if key people are not available.

7.  Establish remote access capabilities so your employees can work from home, if you are unable to access your office premises.

8. Offer payment plans, as customers whose businesses are also struggling may not be able to pay all their outstanding invoices when they are due.

9. Having a line of credit in the form of an invoice discounting facility or bank overdraft can help the business access working capital to meet the unexpected cash flow challenges following natural disasters.
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