Recovering from a disaster
After the shock and disbelief wear off, often the first reaction to a natural disaster is one of: “Why me?” It is a tough period, but if you want to limit the extent of any further losses, you need to work through the feelings of self-pity as soon as possible.
The best way to do this is to channel your energy into limiting any further losses in your business. It is good for your morale and for the health of your business..
This article outlines some of the steps you can take to help your business recover from a disaster.
On this page:
- Safety first
- Assess the damage and file claims for possible compensation
- Ask for help
- Contact your customers
- Contact your suppliers
- Get back up and running
- Collaborate with other businesses
- Be realistic
- Winding up
Safety first
In the event of an incident, the first priority is to make sure that you, your staff and customers are safe. If you are on-site at the time disaster strikes, the first step is to evacuate the building and move away to an area of safety, which will vary depending on the type of disaster and its potential to do harm.
Once people are safe from any further harm, assess if there are any injuries. Identify your first aid officers to give first aid treatment on site and arrange for people with serious injuries to be taken to hospital.
Remember to evacuate using the stairs and not the lifts, and resist the urge to burden yourself with items you hope to save.
If the disaster struck when people were not on-site, it is important to exercise extreme caution. It is natural to want to rush in and salvage whatever can be recovered, but you need to ensure the building is safe to enter before you do so.
If the disaster has affected several businesses in an area you can check for updates on the Civil Defence website.
Be reasonable when considering staff requests for time off or flexible working arrangements at this time, as they may have family matters to attend to.
Assess the damage and file claims for possible compensation
As soon as you are able to access your business it is important to assess the damage in order to put in claims for any possible compensation. Take a camera to document the damage to both stock and property, and contact your insurers to find out if they want to assess the damage themselves before you start to clean up.
If several businesses have been affected by the disaster, the Government or other national, regional or industry bodies might set up funds that offer additional compensation or assistance for businesses not insured.
Chat to other affected business owners to find out about other forms of assistance you might not be aware of and search the Internet for organisations offering relief and assistance.
Ask for help
If your business has been affected by a natural disaster, you do not have to shoulder the burden alone. You can ask for help from a number of people.
Your staff: Chances are your staff will be anxious about their future and only too willing to provide any assistance they can. Many will want to do things out of their own initiative, but their assistance will be more effective and useful if you can channel it in the areas your business needs. For example, you might need help cleaning up, or you might need people to work from home to ensure you continue to meet your business obligations.
Neighbours, family and friends: Your neighbours, family and friends will probably also be willing to help out. There is no need to struggle on your own when you have a support system to call on.
Your bank manager: Your bank manager is likely to be empathetic if your business has been affected by a disaster. Discuss additional finance options or how to restructure your payments to ensure your business survives.
Contact your customers
Make contact with your customers and keep them up to date. Your customers are likely to be supportive, and even sympathetic, but they will want to know how they will be affected. If supplies or services will be disrupted, try to give them a clear picture of the extent of the problem and when you expect to be able to deliver.
If your situation changes, keep your customers updated. They will be more inclined to support you once your business is back on its feet if you’ve been honest and upfront about delivery interruptions. They will be less supportive if they’ve been inconvenienced and had to source emergency supplies from a competitor through lack of communication.
It is important to be realistic in your promises of delivery as you recover from the disaster.
Contact your suppliers
Make contact with your suppliers and keep them up to date again, good communication is key to maintaining supportive long-term relationships. You might need to postpone deliveries or even cancel orders – or you might urgently need replacement stock for damaged or spoilt goods. Either way, clear communication of needs and expectations will ensure you’re most likely to get the support and help you need from your suppliers.
Get back up and running
The type of business you operate, and the nature and extent of the damages, plus the extent to which you have contingency plans in place, will affect whether you can resume trade after a disaster, or how soon you will be able to start operating.
If resuming trade is an option, open your businesses the sooner you are able to start operating, the less your losses are likely to be. Resuming trade will be easier for businesses that offer information or services.
At least some of these business functions can be run remotely either from home or from alternative premises. Your staff might also be able to work from home to ensure deadlines and contractual obligations are met.
Collaborate with other businesses
If you’re not able to get your business back up and running in a short space of time, you might want to consider collaborating with other businesses to ensure you do not let your customers down.
There are several levels of collaboration to consider:
- You could outsource work or orders you’re suddenly not able to complete in-house until you are up and running again.
- You could form a partnership with a similar business in another location to ensure you meet your business obligations.
- You could explore sourcing supplies locally or overseas.
It’s a good idea to discuss this problem with your business advisers such as your accountant, lawyer or mentor, and with your network of business colleagues and peers. Your staff might also come up with some innovative solutions, so discuss the issues with your senior staff and consider running a brainstorming session to find the best solution to limit the losses in your business.
Be realistic
It is important to be realistic in assessing your business prospects after a disaster. There’s little benefit to ploughing time and effort into re-establishing your business if the market for your goods or services has been affected. For example, in the case of a wide-spread disaster, businesses that rely on foot traffic or providers of luxury goods and services are likely to struggle to re-establish their business far more than people who supply everyday necessities that people are going to need.
If you’re uncertain whether your business will be able to resume trading, discuss the prospects with your business mentor or accountant to see if it is worth starting to trade again. If you are close to retirement or were thinking of selling your business, it might be a good time to take any insurance payment and invest it in something else. If the market for your business has been affected, you might be better off investing in another business - most disasters create new business opportunities, so look out for them.
Winding up
If damage has been extensive it might not be financially feasible to continue to operate, or the pressure of starting up again from scratch or in a new location might feel overwhelming. If this is the case, you may want to look at winding down your business or selling what you can, to reduce any further financial and emotional drain.
It is best to seek advice from your accountant, lawyer and advisers to ensure you take the right action to suit your particular circumstances. However, you will want to take steps to get as much money as you can for any salvageable assets and to limit your liabilities as much as possible, as soon as you can.
The first step you will want to take is to cancel all your services and contracts as soon as possible. Try to minimise the money you spend unnecessarily by cancelling your telephone contract, disconnecting the power and other similar services. If you employ full-time or part-time staff, you may want to consider seeking professional advice on the best and right way to deal with your staff and what your legal obligations are.
You will also need to negotiate the termination of longer-term contracts like rental and hire purchase agreements, or even trade agreements. It is a good idea to sit down and draw up a list of all your monthly, bi-annual and annual business obligations to ensure nothing is overlooked.
If you have sufficient money you’ll need to pay off all your business debts or alternatively consider what options are open to you when your company has financial trouble.
This guide to ceasing your business highlights some of the legal issues you will need to bear in mind and this page lists all the things you’ll need to do before you’re ready to close down your business. Finally you will also need to cancel your GST registration and remove your company from the companies register.
