Australasians have one thing on their minds when it comes to remembering the 2010/11 summer – natural disasters. It has been a truly heartbreaking and soul destroying time for us, especially those in Queensland, Victoria, Western Australia, New Zealand and of course Japan.
Cyclone Yasi, intense floods, bushfires and earthquakes have absolutely ravished whole communities, smashing their infrastructure and townships, not to mention the tragic loss of life they’ve caused. It really is a time to mourn, but for many the time has also come to move forward and rebuild their homes, workplaces and businesses – be it physically or strategically.
It is times like this when SMEs could use a helping hand. Bringing a business back from the devastation of an unforeseen event is not an easy job. The following tips will provide some guidance, both for Aussie SMEs beginning the business rebuilding journey and for all businesses on how to be prepared for the unexpected.
1. Insurance – speak with your insurance broker or insurance 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. You never know when disaster will strike – always back up your records and keep the back-up in a safe place (online storage is a good option).
3. No one wants to think disaster but having a plan on a ‘what-if’ basis never hurts.
4. Relocation – if you have to move 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. Key personnel – make sure as a business owner you know who does what and what coverage you have if key people are not available.
7. Remote access – with the breadth of technology solutions available today, the absence of an office premises does not have to stop employees from continuing their work. Establishing remote access capabilities facilitates work-from-home opportunities
8. Keep your eye on collections – payments from customers will likely extend out further than normal as the distraction from the events also impacts customers’ ability to settle up on outstanding invoices.
9. Offer payment plans – customers whose businesses are also struggling to get back on their feet may not be able to pay all of their outstanding invoices when they come due. Offering payment plans not only increases the likelihood of collecting the total amount due, but also can generate goodwill with the customer.
10. Set up a financial safety net – 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 cashflow challenges following natural disasters.
Many businesses will be relying on insurance to compensate for certain losses from the natural disasters. Whilst this is a critically important source of cash to businesses impacted by natural disasters, the timeframe in which the damage can be assessed and compensation paid can be challenging for businesses looking to get back to work quickly. In these situations, having a financial service in place to help through these periods can be life saving for small businesses.