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5 Ways to Protect Your Business From Hurricanes

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(Alan Crosthwaite/Dreamstime)

By    |   Tuesday, 06 November 2018 08:20 AM

Hurricanes Florence and Michael have given us grim reminders of how destructive these storms can be.

Scenes of destruction have continued to pepper our TV screens and computer monitors since last month. In fact, Atlantic hurricanes in the U.S. cost roughly $1.8 billion on average in property damages. However, many would agree that the true destruction of hurricanes can’t be measured by the dollar costs of property damage.

Small businesses that are forced to pick themselves up after facing a hurricane often face problems much worse than simple property damage. Small businesses often lack the cash reserves to stay afloat for six months, while their stores are rebuilt or undergo repairs.

Even if a business is quickly able to repair itself, there’s no telling when its customers will be able to pick themselves back up and resume normal shopping behaviors. The simple truth is that natural disasters like hurricanes are some of the worst events that can happen to a small business.

Here are five steps you can take to better weather these storms.

1.) Get Insurance

Unfortunately, there isn’t one single insurance policy one can purchase to cover all the different forms of damage a hurricane can cause. Although the exact policies you purchase will most heavily depend on your location, you can expect to at least purchase flood, windstorm and business interruption coverage policies. If you operate your business out of your home, you’ll need to add on homeowners insurance as well.

Insurance costs will vary, but flood insurance alone usually starts at $700 per year. Be sure you understand exactly what will be covered under your specific insurance policy. Every single item in your store or office likely won’t be covered, so it is critical that you understand what is.

2.) Protect Your Employees

If you have any employees, you’ll want to ensure they are safe and out of harm’s way in the event of a hurricane. Lay out an emergency plan with them, and be sure they’re aware of evacuation plans. Additionally, try to let them work remotely during the days leading up to a hurricane. You’ll want to give them time to prepare their own homes and make sure their own families are safe. If possible, we recommend you pay your employees in advance while banks are still open.

3.) Secure Your Property

Even if you’re fully insured from every imaginable type of damage a hurricane can cause, you’ll still want to take steps to secure your property, as the less-damaged your property is, the more quickly it’ll be fully repaired. Here some steps to take:

  • Clear all drains and gutters.
  • Remove loose objects from your building, like antennas and signs.
  • Protect windows and glass doors with thick plywood.
  • Protect doorways and openings with sandbags and tape to prevent water from getting in.
  • Repair any existing leaks or holes in the walls or ceiling.
  • Make sure nothing of value is near the windows.

We recommend prioritizing the largest and most expensive items in your office first. Secondly, secure the items that insurance won’t cover. Be sure to understand the cash value of all of your items, as that will come in handy come time you claim your insurance.

4.) Ensure Business Continuity

In order to ensure productivity doesn’t entirely drop in the event of a natural disaster, set up workflows so that your employees can work remotely and still be efficient. Cloud sharing platforms to store and collaborate on documents, providing hardware for employees to work on, and more are all ways to ensure your business still grows during this time. Popular collaboration tools to use are Google Drive, Zoolz and Egnyte.

If you deal with physical inventory, make sure you secure your inventory and move it a location that won’t be affected by the hurricane, if possible. Communicate your concerns with your vendors well ahead of time in case of sudden interruptions. If you purchase the insurance we recommended above, you should have business continuity protection, but an ideal situation would be the opportunity to continue to grow your business even during a hurricane.

5.) Dealing With Repairs

Inspect your office for damages and be sure you consult a professional before you use any affected equipment or appliances. Additionally, if your office has endured significant damage, you’ll want to hire a contractor who has experience with water damage and mold.

Luckily, the Small Business Administration (SBA) issues disaster loans for homes and businesses. Check the SBA’s site to see if your area qualifies for an SBA disaster loan.

The average size of an SBA Business Physical Disaster Loan was roughly $130,000, so if you need additional financing for repairs, you may want to apply for a business line of credit. The benefit of a line of credit is that you only pay fees on the amount you use, making it ideal for situations where you aren’t yet sure exactly how much you’ll spend.

Joe Resendiz is a Research Analyst at ValuePenguin, where he focuses on personal finance and credit research to assist consumers. Previously, Joe specialized on public sector and infrastructure financing at Goldman Sachs. He graduated from the University of Texas at Austin with a BBA in Finance.

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The simple truth is that natural disasters like hurricanes are some of the worst events that can happen to a small business.
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Tuesday, 06 November 2018 08:20 AM
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