SFMS Blog | Southern Fabricating Machinery Sales

Planning & Recovery Tools for COVID-19 Affected Manufacturers

Written by Southern Fabricating Machinery Sales | April 22, 2020

Many of our businesses were taken off guard with the COVID-19 disaster. Unlike other disasters that can affect our businesses like fire, flood, theft or vandalism, this disaster swept worldwide hitting every community, state and country at the same time shutting down the Global Economy. In many cases businesses screeched to a halt and income dried up while the expenses kept coming. If a disaster plan was in place, it was likely very inadequate for the stresses that this brought across the board and while governments attempted to buoy small businesses with stimulus’s, low cost loans and payroll protection plans, many of these solutions were overly cumbersome to apply for, often denied and took weeks or months to receive. 

In the following paragraphs we will discuss how to prepare ahead of time and then, in summary, provide useful links and tools to mitigate this disaster specifically on your business.  There is a lot of help available that you should be aware of. 

So how can you be prepared for a disaster like this, or any others? What can you do to make sure your business is disaster ready? 

Plan Ahead 

The first step of being disaster-ready is to plan for one. Planning ahead for different scenarios can make surviving them much easier. Starting preparation for the next disaster whether it be Fire , Flood, Wind or Viral begins right now. 

Photograph Everything 

Inventory of all your commercial assets and property is vital to recovering those items from your insurer later. The easiest way to create a physical inventory list is to photograph your business (and personal) assets. Not only do photos show the asset existed, they often can show the condition it exists in. Make sure those photos are stored in the cloud as your device may become damaged or unusable AND you can instantly share cloud based data much easier. You may also wish to video your facility as many times a video can capture much more detail as you pan around then individual still photos.

Emergency Funding

As with your personal expenses, your business should have savings aside for an emergency fund at least for 3 months including mortgages, rent, payroll etc. If 3 months funding seems difficult to reach, set a goal for 1 month’s expenses, then another until you reach your goal. Emergencies can stop or drastically eliminate your business and future business potential. Having funding set aside and available can make the difference between surviving intact or surviving a disaster at all. 

Move to the Cloud

More and more information is becoming digital, from tax returns to Invoices and PO’s. Having these digital document copies stored securely in the cloud makes sense for a couple reasons.

      • They are accessible on any device and from anywhere, even from home.
      • ALL Media from Docs, to Movies, Pictures, Scans etc can be uploaded and saved
      • They are secure from fire, flood, windstorms, theft and disease
      • They can be shared with either a link or simply adding a recipient to access the document 
      • They can be treated as just another drive on your PC allowing you by default to save items there. 

There are many different types of cloud based applications you can use to secure your data. Each of these will require some sort of subscription to maintain and allow for the 1+ TB (Terabyte) of data that you will likely need. Some of the most popular are (links provided): 

Prepare Financially

Savings: Often one of the hardest to maintain but most important, is business savings. A business savings account can be an excellent resource for stashing capital that may become highly necessary during a disaster or pandemic. As these funds can be accessed quickly it also makes great sense to have at least 10% of your annual Gross revenue in a business savings account for emergencies, including operating expenses for not less the 3 months. 

Lines of Credit: In times of disaster your line of credit will become a valuable resource while awaiting FEMA, SBA or other loans available to your company during the times of crises. It is important to have access to and funds available from your line of credit. It is also very worthwhile to shop around to other banks including credit unions and smaller institutions for these lines as they often have much more aggressive programs in place for businesses in order to win the business. However it is important to note that during past financial disasters banks were known to Close or Limit credit lines when their exposure became significant (i.e. Housing Crises of 2008) so what was available one day to businesses disappeared overnight making savings accounts much more valuable. 

Insurance: Insurance can play a major part of any disaster plan. While we may not be able to prevent disasters we certainly can be better prepared for them financially by having the right insurance at the right amounts. While insurance can't prevent disaster it can financially help to quickly bring your poperations back after one. Policies are available for:

    • Property Insurance (aka Business Property Insurance): Protects your physical location and property from Fire/Flood/Theft and includes Tools, Equipment, Inventory & Furnishings 
    • Workers Compensation: Provides your employees benefits if they have work-related injury or illness by providing  medical care, replaces most of their lost wages during their recovery, provides disability benefits and can pay for their Funeral expense if life is lost but it also benefits you the small business owner as it can help cover your legal costs if you are sued by the employee of their family. 
    • Commercial Auto: Unlike personal auto insurance policies, a Commercial Auto Policy protects the business in the event of an accident using not only the company's vehicles, but personal vehicles being driven for company business too. 
    • General Liability: Claims against your business for bodily injury or property damage
    • Professional Liability: Claims against your business for errors or omissions in the services you provide. 

There are also policies that can include coverage for income losses due to business interruptions (like Covid-19). Check out the links below for more information on Business Insurance and Business Interruption Insurance.

Commercial Property Insurance

What Types of Insurance Does a Small Business Owner Need?

What Is Business Interruption Insurance?

In summary there is no need that we can't be better prepared for the next disaster coming our way. With a few simple actions we can protect the investment that is our business.  

  • Plan ahead by preparing your documents, important records etc to be either copied and kept in another safe location.
  • Move to the Cloud in order to have your files instantly shareable and accessible from any device.
  • Insure your Investment

Here are some other great resources available right now for COVID-19 Related recovery and assistance. 

Disaster Kit Preparation

Preparing a Disaster Emergency Kit 

Business Management Tools & Resources

Stimulus Package Updates

National Association of Manufacturers (NAM) COVID-19 Resources

COVID-19 Policy Tracker

Centers for Disease Control (CDC) FAQ

State-by-State COVID-19 Guidelines

SBA Paycheck Protection Program Information

Human Resources

FAQ’s for Employers

Communicating Through the Coronavirus Crisis

Communication Resources

OSHA’s Guide on COVID-19

At Southern Fabricating Machinery Sales, Inc we care about our customers, suppliers and business partners and want you to have access to all the same help and resources we found available to us. When the time is right, contact us for any machinery needs whether buying or selling as we are standing by at the ready to assist you in your manufacturing needs.