Rebuilding After A Natural Disaster — Experts Weigh In

From horrific hurricanes to devastating wildfires, 2017 has been a year full of natural disasters which have destroyed the homes and businesses of countless entrepreneurs. The good news is that businesses can be rebuilt after disasters — but what should entrepreneurs tackle first in the recovery process? Here’s what our panel of small business experts had to say on rebuilding after a natural disaster and how to prep in advance to protect the assets of your business before Mother Nature strikes.

1. ”First and foremost, you should ensure that everything in terms of files and data is backed up; receipts, staff details, accounts, contact details, invoicing, insurance – all this needs to be backed up in preparation for any kind of disaster, especially one where you may lose your premises altogether. Back all this information up on a USB or hard drive and keep it stored safely at home. If your business is badly affected by a natural disaster, having this information securely put away will make rebuilding your company a much swifter process. If your business is damaged by a natural disaster, you should contact your insurance company immediately. Failing to contact them, or even delaying your claim, can lead to your payout being lower than it should be, or even turned down. Inform them of everything concerning your claim, including what was lost or damaged, when the disaster occurred, and who they need to be in touch with.” — Steve Pritchard, Founder, Cuuver 

2. “After your business gets hit by a natural disaster, it’s critical to communicate with all of your employees to make sure that everyone is safe. Try to understand everyone’s personal situation and see if they are able and willing to continue working given their unique circumstances. It’s also imperative that you check that both your physical and virtual data are safe and intact. This includes contracts, customer information, tax returns, and other business and legal documents. Lastly, make sure that you contact your insurance company to see what damages will be covered. If you ever anticipate a natural disaster, it’s important to have a business continuity plan in place so that you can continue to operate your company. This plan should account for temporary unavailability of certain employees and loss of IT systems. Make sure all key personnel at your firm understand and have access to this plan.” — Peter Yang , Co-Founder, ResumeGo

3. “Since my company is in the IT industry, the first thing that will be losing is our equipment. Regardless of the kind of natural disaster that hits, I can lose the business because our most important piece of equipment is the computers. So, to help prepare for potential natural disasters, I have set aside new computers in storage, extra money, and backed up all the important data into a private cloud storage, and an external hard drive which I keep with the computers in storage as well.” — Ian McClarty, President, PhoenixNAP Global IT Services

4. “Every month, we set aside a small amount in case of an emergency. We also keep emergency canned goods, clothes, and other materials in the office, in case we get stranded for a few nights. In the event that we do end up getting hit by a storm or an earthquake, we also have insurance. We plan to take things step by step to get the office back to the way it was by starting with the most important pieces of equipment first.” — Jason Cummins, Owner, All Hours Air Inc.

5. “One of the most important things businesses can do to protect themselves from natural disaster is implement cloud-based document management software (DMS) before they hit. This will insure that important documents are not lost and allows the company to keep the business running remotely while they are physically unable to be in the office. That way business doesn’t come to a halt when a disaster strikes.” — Jessie Wood, CEO, eFileCabinet

6. “People throughout the southern US and Caribbean are dealing with the aftermath of what will likely be the worst disaster they have experienced. Businesses in those impacted communities are facing a long road to recovery and rebuilding, even if they had an emergency plan in place. However, through struggle comes strength and small business owners across the country should take steps to be prepared for the future and protect their business in the event of a crisis. it is imperative for small businesses to gather and organize their critical business records and store them in the cloud. Invoices, bank statements, contracts, federal & state tax returns, budgets, agreements are the essential documents that keep a business operating. After a disaster, these are the documents that will be key when dealing with an insurance agent or applying for relief funds.” — Kevin Miller, CMO, Neat

7. “I live and own a business in St. Thomas, US Virgin Islands. We were hit by two Category 5 Hurricanes in less than 2 weeks. Our wedding business was devastated. We have decided to make two changes going forward with our business:

1) Allow for remote operation of our business:
We lost all power and phone communications for over a week. We were unable to communicate with any of our couples during that time. Next time at least one of our employees will be moved out of the path of the storms so that we can keep our couples up to date on their weddings and answer disaster related questions. 

2) Spell out in our contracts that in the event of a natural disaster, we reserve the right to move to a new location: Over 30 weddings were canceled for the remainder of this year. We have since set up emergency operations in other locations (Antigua and St. Croix) where we can easily move weddings to. We estimate we could have moved at least half of them to another location and would have saved significant revenue. 

My biggest piece of advice is to have at least 12 months of reserve cash set aside to operate the business. We were fortunate in the storm to have set aside 12 months of savings to operate our business in the event of illness or other disaster. Little did we know that 2 catastrophic storms would strike our island. By having significant savings set aside we have not had to worry about closing the business or seeking alternate employment and have instead focused on growing and expanding our business.” — Michael Motylinski, Owner, St. Thomas Weddings

8. “First off, respondents considered floods, fire, and natural disasters to be some of the most damaging threats to their businesses, ranking ahead of tax increases, injury to an employee, and a host of other threats. Second, turns out that business owners can do a lot more to prepare themselves in advance of a disaster. According to our research, among business owners who say a natural disaster would be “extremely damaging” to their businesses, only 28% have disaster insurance and 23% have business interruption insurance. This means business owners are highly exposed on two dimensions: (1) damage to physical property, and (2) loss of revenue due to business interruption. These matter because according to our survey, 1 in 5 small businesses would shut down in less than 30 days if sales stopped completely, and 3 in 4 wouldn’t last six months. Once a disaster hits, it’s too late. But business owners can protect themselves by purchasing proper insurance to protect their physical properties and business revenue.” — Brad Plothow, Head of Communications, Womply

9. “We took extra precautions to prepare for calamities. We prepared by backing up all our client information into an online service drive. We also have a backup on a hard drive that we keep in a safe place. In case the time comes that our business gets hit by a natural calamity, we will contact insurance first, then start buying new computers so that we can transfer all of our files from the hard drive or from the online storage service. We also have a bank account that is for emergency purposes only, which we do not touch.” — Joanna Douglas, Owner, Clean Affinity Cleaning Service

10. “It is said that for every day, week, or month your business is not operational, the chances of survival are reduced. That is why is so important to have a recovery plan in place. This is what I recommend: 
1) Plan for all contingencies, from short interruptions to a worst case scenario. When you know your threats, you know what you need to work against.
2) Have a recovery plan and know how you are going to get back to normal business operations quickly.
3) Have a rebuild plan, if you need to start over, how would you do it? Start with a single product or service and build up. 

When developing worst case scenario plans (start overs) we focus on a single offer that will bring in cash quickly or easier than waiting to have an entire business ready. If it’s a restaurant maybe you can rebuild by starting with a food truck, or offer catering, sublease certified or licensed facilities and start somewhere. If it’s a fashion retail business, start by offering wardrobe make overs or consulting services while you can rebuild to the pre-disaster stage. The problem I find the most is that businesses want to wait until everything is ready or as it was pre-disaster to start generating income and that can take months. The other problem with that is clients are lost due to the fact that if you are not there, they will find someone else to meet their needs. 

Plan ahead and take imperfect action and start. With time you can get to a pre-disaster condition, but be realistic only mega corporations can return to pre-disaster condition in a short time. Why? They all have plans in place, they know what to do ahead of time to get to that pre-disaster condition fast.”— Lisandra Pagán, Emergency Preparedness Consultant, Deliberate Plan Consulting

11. “Rebuilding a business begins with the physical, practical restoration of what’s been lost. In the wake of a disaster many people are taken advantage of by fraudulent restoration companies. To help business owners protect themselves, we’ve created a guide to promote awareness and education in the midst of an emergency. Our disaster resource includes extensive information on water and data restoration. It also offers advice on what qualities to consider when choosing a restoration provider and features verified reviews from other consumers.” — Audrey Isabelle, Content Marketing Specialist, ConsumerAffairs

12. “Before the natural disaster: 
1) Make sure you have complete copies of all property insurance policies. This includes any separate policies you may have for flood, wind and EQ. It’s important to have the complete policy – not just the binder.
2) Review with your broker, ahead of time, how your coverage will respond. For example, if there is a hurricane coming, ask them to provide a summary of your windstorm coverage with limits, sublimits, deductibles and waiting periods.
3) Obtain information regarding how to file a claim. Always include your broker when you email the insurance carrier.

After the natural disaster:
1) Life safety ALWAYS comes first. Do not put yourself, your employees or your customers at risk.
2) Beware of public adjusters who will want to help you adjust your claim, and take a percentage of what the insurance company pays. Make sure to vet everyone who calls you and confirm with your broker that they are from the insurance company, or an outside firm hired by the insurance company before you allow anyone onsite.
3) Take pictures and videos of the damage. Try not to discard anything until the insurance company adjuster gets there.
4) Keep track of all expenditures for cleanup, including supplies purchased for the cleanup, supplies on hand used for the cleanup, and extra labor. Keep track of all items that had to be discarded.
5) Your broker should be your partner and advocate during this process. If they are not assisting, request to work with the claims director or start looking for a new broker.” — Dana Gold, Insurance Consultant, Risk Management and Insurance Consulting Services 

13. “Now we are exclusively in the art & design business. However, over the years we have had several additional businesses. At one time we had 3 brick and mortar locations in Houston. One of the locations was flooded twice. On a separate occasion, the other two locations were hit by the same tornado (this tornado cut a path a forth of mile wide for over 100 miles). 

In the case of the flooding, we could pump out the water and get everything disinfected and repainted quickly, so we were only out of business for a few days. In the case of the tornado, one location had minor damage, while the other was gutted/the roof was torn off. We had to permanently close the extremely damaged location as the landlord decided to demolish the site and put in a different type building. 

I must first offer my sincere expression of empathy for the business owners hit by natural disasters and my prayers that they will recover as quickly and fully as possible. 

The best advice that I can give is the following:
1) Let your clients/customers know as soon as possible that you will reopen and that you would appreciate their prayers and patience. Do not let them think that you might be throwing in the towel.
2) Try to meet the needs of your clients/customers the best that you can under the circumstances. This will not only keep you in touch with your client base, but will generate some much needed income. If you have other locations, offer incentives to those willing to drive a bit farther than the convenient location that was destroyed. In many cases, the customers in the area around your damaged business probably also suffered damages so they will appreciate discounts.
3) Be a visible part of the overall community recovery efforts.
4) Keep your clients/customers informed as to the progress that you making toward reopening.
5) Make your reopening a special event.
6) Stay positive and focus on what you have left, not what you have lost.” — Pablo Solomon, Designer, Pablo Solomon Artist and Designer

14. “After a natural disaster,  the first thing to be done is to evaluate the extent your business was damaged. Afterwards, consider what resources are easily available and accessible to start rebuilding. Also find out if the government is rendering any form of assistance in recovering from the loss.If your business has an insurance cover, you should also contact them for assistance. From the foregoing,  you can gradually rebuild your business and as you do that find out if your geographical location is prone to natural disaster;  if it is, you should consider relocating the business.
What can be done to prepare for a natural disaster is:
1) Get an insurance cover for your business.
2) Save during rainy days to sustain when disaster strikes.
3) Endeavor to make your business flexible i.e. you should be able to operate from other locations.
4) Affiliate yourself with other entrepreneurs in your niche” — Egwuagu Charles U., Director, Carl-Dave Global Ventures

15. “One way to rebuild your business after a disaster is to eliminate your back-office paperwork by going digital. Whether it’s a hurricane, flooding, fire, or any disaster than can impact a business, your documents – work schedules, payroll, time sheets, etc. – are essential to running or rebuilding your business. Many small and mid-sized businesses in Texas and Florida lost their paperwork from flooding and rains from the recent hurricanes Harvey and Irma. One-way small businesses can rebuild or prepare for a next disaster is to transfer all their paperwork to digital. Owners or managers can rest assured that their valuable paperwork will not be lost in a natural disaster and will be saved and stored in the Cloud.” — John Waldmann, Co-Founder and CEO, Homebase

16. “After a disaster and the claim has been reported to your insurance company and the local government has done their work and cleared the way to allow business owners back in, then the rebuilding process after a disaster starts. The major question that a business owner must ask themselves is if a business is still viable and if it is viable in this location. The owner of a business must ask two hard questions: What are other businesses doing and what will sustain my businesses to obtain a return of investment within a reasonable time frame? Evaluating where to rebuild your business is key. Business owners should conduct a vulnerability study of the location where one plans on building. One needs to assess potential manmade, natural, technical and financial hazards and the impact these may have on the future of a business. A business owner needs to evaluate if he or she can protect and mitigate these risks. Evaluating these risks requires three components: The threat, its likelihood, and any potential impacts. If there is a high likelihood, a high threat level and the high level, then there is a high risk. The owner’s objective is to develop controls to keep the consequences of severity and the probability of risk low. Business owners looking at their business continuity should review the National Fire Protection (NFPA) NFPA – 1600 – Standard on Disaster/Emergency Management and Business Continuity Programs – 2016, which is a free downloadable pdf file. Steps to take in advance to make the process of returning to normal a little bit easier include: *CONTACT INFORMATION: *Having important contact information saved on your phone really helps a lot. This should include your insurance company’s contact information and pertinent policy numbers. This can really help save a lot of time if you need to file a claim due to some sort of damages.*KEEP DOCUMENTS SAFE: *Having a safety deposit box filled with items like your social security cards, property titles, passports, policies and the like will help save you massive amounts of stress and time in case of a disaster. However, if you do keep those items at hold, please keep them in either a top floor unlikely to be destroyed in a flood or bring them with you in an envelope in case you must evacuate.*PHOTOS: *Having photos of your property in their normal condition will only help you if and when you need to file a claim. Inspectors can use a comparison photo when coming up with a dollar figure to present to you later.*ONLINE STORAGE: *With today’s technology, a lot of photographs and other sorts of documents can be kept online via a cloud provider. These can be accessed everywhere, which will help a lot if you and your family will be out of your house long-term.” — Coleman Brown, CBIZ Inc., Vice-President Loss Control

17. “There is a number of things businesses can do to rebuild and prepare for natural disasters:

– Start by preparing a crisis communication plan – tips and action items of who to call and how to proceed 
– Consider a temporary relocation
– Store and backup all electronic data
– Guarantee you have insurance
– Implement VIMRO Moves Office-in-a-box” — Alex Chizhik, COO, VIMRO

We want to assist you if you’re starting a business that helps benefit a Hurricane Harvey or Irma-ravaged area. Throughout the rest of 2017, MyCorporation is offering a FREE EIN with any Texas or Florida LLC/Corporation order. Let’s come together as a community to rebuild these states together. Give us a call at 1-877-692-6772 and mention HARVEY or IRMA to have the code applied.