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examples drawn from real businesses.
Like ice cream, disasters come in many flavors--they might be served up in cups or cones. Your small business must be ready no matter what.
Big companies have deep pockets. They have relationships with big banks and can ride out disasters--including a bad economy. They can go to the short-term overnight loan market to even out cash shortfalls and disaster recoveries.
Small businesses do not have these resources. The only deep pockets are your own.
Example: Daryl faced ruin when heavy rains resulted in a flooded street. His pet store suffered extensive water damage. It didn't stop there. An electrical fire broke out and did more damage. Daryl had insurance, but it took almost three months to get the store fully operational again. Facing no sales and no income, Daryl struggled to pay on-going bills and get back in business. He contacted his regular customers and supplied standing orders for dog and cat food he had stored in his garage. He temporarily partnered with a local veterinarian to display some of his pet products. He involved his customers in the reconstruction by posting pictures on Facebook every day. When the pet store was finally ready, he held a grand re-opening, and his business thrived again.
Example: Eleanor runs a graphic arts firm. the business was going well when suddenly the landlord informed her that the building was to be completely renovated--she had 60 days to vacate the premises. The lease she had signed granted the landlord that option. It also stated that the landlord could buy out the remaining months of the lease--so Eleanor received a sizable amount of cash. This helped her find another place, move, and transition to new quarters. But the disruption in on-going work was significant. She turned the disaster into a positive by growing into a larger space, buying new equipment, and hiring an additional employee.
Example: Early in my first small business, I had a problem that taught me a valuable lesson. The husband of a key employee called one morning, saying his wife was in the hospital. Doctors were treating her for a ruptured appendix, and she would be absent for at least the next two weeks. I felt badly for her and assured the husband that if we could do anything, just let me know. Then I realized I had a predicament--she was the only one who knew how to run the new computer to produce some critical on-going work. It was a different kind of disaster. I learned that I must always cross-train employees so that someone could jump in to handle any job. It was a valuable lesson that I carried with me through several small businesses later on.
Disasters happen. Think through how you can react when the unthinkable happens. Your planning ahead can help you sleep at night.
More examples of businesses coping with disasters are scattered throughout these write-ups. Fire and flood, even key employees, can be covered with insurance. But the best insurance is your own planning ahead.