On Tuesday, August 23, the Small Business Development Center, a division of the United States Small Business Administration, held a Business Resiliency Check-up Workshop at the Milford Public Library. The program was made possible by grant monies the agency received after Hurricane Sandy.
“After Hurricane Sandy, many businesses realized that they were far from prepared for disaster” said Bill Pfaff, Southern Delaware Director of the University of Delaware’s Small Business Program Center. “As a result, grants were developed that would help businesses through outreach and education to prepare for the ‘what-ifs’ of the world. Business interruption happens in many different forms, whether it is floods, fires or the illness of a primary stakeholder.”
Mr. Pfaff said that every business should have a section in their business plan that addresses resiliency. This is especially true of one-person companies who could suffer significant income reduction if they become ill or were injured in an accident. Mr. Pfaff used the downtown Milford fire as an example of how one catastrophic event could affect an entire area.
“The businesses destroyed by fire were directly impacted, no question,” Mr. Pfaff said. “However, other businesses in the area also suffered business interruption. They were unable to access the street while the fire investigation was going on and many of them could not return to their businesses until some of the debris was cleared. Even though their business suffered no damage, they suffered losses when they were unable to open after the fire.”
The Small Business Development Center offers a free Disaster Protection and Recovery Tool Kit for Small Business that includes important information such as a resiliency check list and tips for protecting a small business from catastrophe. Some of the tips offered include storing important documents offsite in a fireproof or waterproof box or online as well as keeping all important information updated.
Angela Dorey of Dorey Insurance and Financial Services discussed how important an insurance agent can be for businesses.
“Think about the last time you sat down and talked honestly with your insurance agent about your risks,” Ms. Dorey said. “No one has the time to sit and read a lengthy insurance policy. It is our job as your agent to address your needs and get you the right coverage. But we need to know all the facts in order to protect you properly. Identify what is important to you and then let us know what those things are. We know that people don’t like talking about income, but your agent has to know all the ins and outs of your business.”
Mr. Pfaff said that anyone in business should consider the professionals they hire as their board of directors. They are there to advise, consult and provide business owners with the tools they need to succeed.
Craig Lytle of Income and Estate Planning Partners, a certified financial planner, talked about ways to be sure your employees are included in any disaster planning. He said that communicating with staff members was the best way to have expectations met. He also said that there are steps that can help build a business of enduring and transferable value by determining the value of the business and benchmarking against peers and businesses of greater value.
“Create a set of specific and flexible blueprints to guide your business decisions,” Mr. Lytle said. “Build the strength of your enterprise through proper structure, competitive compensation and appropriate profit distributions. Build revenue strength with a diverse, profitable client base and institutionalized client relationships. Keep your business and individual brand in mind in all that you do.”
Tammy Ordway of Faw Casson Certified Public Accountants, explained ways that businesses could protect their financial records from disaster. She pointed out that few businesses could afford to hire an accountant when they first start out and that the job usually fell to a spouse or to the owner. However, she said that an accountant can be a valuable tool in helping develop a financial plan and for confirming that the financial documents a business is creating are properly compiled. Ms. Ordway said that there were four steps to creating a good financial base for any business. The first step was to organize all financial records.
“I always recommend Quickbooks, although I was not initially a fan of the program,” Ms. Ordway said. “My first thought was that clients would decide they didn’t need professionals to do their accounting for them. Now, I see significant benefits in programs like Quickbooks. You must have organized financial records in order to move to the next steps in creating a good financial base as the second step is creating financial reports. These include balance sheets, profit and loss statements among others. Next, you must create a budget, which Quickbooks and programs like it can help you complete. Finally, you need to create a margin analysis.”
Ms. Ordway suggested that business owners hold regular meetings with staff regarding company financial records. Her advice was to note on the calendar at least once each month when a business owner would review financials and make any adjustments necessary. For more information about business resiliency and preparing for disaster, business owners can contact Cindy Small, Resiliency Program Coordinator, at 302-856-1555 or via email at email@example.com.