If your premises are hit by a disaster, you are not alone: according to the Business Continuity Institute (BCI) nearly one in five businesses suffers a major disruption every year. This could be caused by anything from a burst water pipe that ruins stock or a fire that guts the building to a falling tree smashing through the roof.
To limit the impact on your cashflow, you must get your business back on its feet again as soon as possible. Salvage whatever you can from your premises and store the items in a safe, temporary location. Saving customer records, equipment and furniture may be essential to get trading again quickly. If the premises have been damaged, make sure they are safe to re-enter by checking with the fire service or local council.
If you rent, check the terms of your lease. The landlord is usually responsible for buildings insurance, so they will be responsible for claiming for damage to property. Your lease should also be clear about disruption to trading caused by damage to the building; you may be able to suspend rent payments or even terminate your contract.
Insuring equipment and stock is your responsibility. Make your claim quickly - although an insurance company can make an interim payment, you will probably have a lengthy wait for a payout. In the meantime, you need to find a way to cope with ongoing expenses, such as staff wages and loan repayments.
Speak to everyone you owe money to and ask if you can defer payments. Ask your bank to extend your overdraft, if necessary, and try to negotiate a loan at a favourable rate to cover unavoidable outgoings. Next, ask people who owe you money to make the payments as a matter of urgency, and find out whether you qualify for emergency grants offered by any local business-support agencies.
If your premises are unusable, you will need to find another site to trade from, whether temporarily or permanently. Ask around your contacts - depending on your situation and sector, you might be able to sublet for a while from another business. You may also be able to sort out a temporary home by negotiating a short-term lease on any vacant premises locally.
When replenishing stock, ask your suppliers for credit. If you need to replace equipment, look into leasing arrangements or ask your contacts for loans - business owners stick together in emergencies and may be happy to help you out. Once you are up and running again, let your regular customers know by contacting them directly, taking out a newspaper advert and, if you have moved, putting a sign up on your old premises.
Once you have started trading again, put a disaster contingency plan in place in case your business is hit again in future. Review your insurance policy to make sure it is still current, keep receipts of everything you buy in a safe place, and take pictures of your premises for insurance purposes.
- For more information on premises, visit the 'Grow your business' pages of the Highlands and Islands Enterprise website www.hie.co.uk/business.htm
- Download a PDF on creating a disaster contingency plan from the BCI website www.thebci.org/London%20Firsts.pdf