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?
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.
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.
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.
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.
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):
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:
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.
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.
Here are some other great resources available right now for COVID-19 Related recovery and assistance.
Preparing a Disaster Emergency Kit
National Association of Manufacturers (NAM) COVID-19 Resources
Centers for Disease Control (CDC) FAQ
State-by-State COVID-19 Guidelines
SBA Paycheck Protection Program Information
Communicating Through the Coronavirus Crisis
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.