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Small Business Digest



Planning For The Next Disaster Starts Now; Damage Replacement Tips

There are lessons to be learned by companies from the recent Sandy disaster.

For many small businesses in the affected states, Sandy was a disaster not only initially but because of power shortages, damages and long periods of business inactivity.

While it is impossible to plan for all emergencies, there are things a business leader can do before another emergency hits.

For the future, Jennefer Witter of The Boreland Group Inc. says "Having a crisis communication plan before a crisis happens is smart thinking for every entrepreneur and business leader. When you're in the midst of a crisis, clear thinking does not always prevail and critical decisions can be overlooked. Having a proposal in place will help to enhance decision making, reduce downtime, lessen the loss of revenue and, most of all, provide peace of mind."

She offers four key steps in crisis communication planning -  

First step – Identify risk threats:

  • -Particular to your industry (ie aviation - hijacking)
  • External threats - ie, severe weather, ie hurricanes
  • Internal - workplace violence, accidents
  • Identify your audience: staff, clients, vendors

Of the above, the staff is the most important because without employees, there is no business.

Second step - Create a crisis communications team

  • Identify the senior executives who will comprise the team
  • Outline their specific responsibilities-- Select one person as the overall coordinator, to ensure a primary point of contact among the participants and to help ensure a smooth flow of action.

Third step - Create a crisis communications plan

  • The plan should outline threats and how to address each risk
  • Elements of the plan should include:

Off-site disaster recovery location (where electronic data can be stored securely and accessed easily in times of emergency)

      Lists of each staff member, their home and work emails, their phone numbers (cell and work), and work address

Clients and vendor contact lists

Electronically, the senior team should have a device that allows them to access the Internet without wifi or direct connection - This will allow them to communicate without delay. Ideally, each staffer should have one, but the expense may be prohibitive

Identify the messaging behind each risk

Create collateral, based on that messaging, that will require little or no editing so communication among audience members is fast and efficient

Fourth step - Review

  • The plan should be reviewed at least one every six months
  • If possible, the plan should be tested to determine any weak areas that need to be addressed
  • If it is enacted, there should be an immediate review post-event for a lessons learned session and how the plan can be improved 

Ernest DelBuono, Senior Vice President of LEVICK and Chair of the firm’s crisis practice offers these suggestions:

 “Long before a storm hits, small business owners need to know where to go to obtain financial assistance. This should be right at the top of the business owners’ pre-storm checklist along with sandbags and emergency generators.”

 “Having this information is especially important because for many small business owners time is critical. While having websites to go to in advance is important, business owners should also know where Business Recovery Centers are located in the event power failures and loss of the internet occur as we are seeing in Sandy’s aftermath.”

Besides offering emergency assistance, the Small Business Administration (SBA) offers long-term, low interest loans:

For Physical Disaster Loans

  • Businesses of all sizes and private, nonprofit organizations may apply for a Physical Disaster Loan of up to $2 million to repair or replace damaged real estate, equipment, inventory and fixtures.

For Economic Injury Disaster Loans

  • Small businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and most private, nonprofit organizations of all sizes suffering substantial economic injury may be eligible for an Economic Injury Disaster Loan of up to $2 million to meet necessary financial obligations, expenses the business would have paid if the disaster had not occurred.

For businesses with access to internet, allows one to complete a questionnaire to acquire an accurate list of assistance programs for which they may be eligible. The following questions are directly related to disaster assistance.

To assist the vast number of small businesses impacted by Hurricane Sandy, Biz2Credit, has launched a landing page with advice on recovery assistance and a special package of services to help companies in need of loans and working capital in the storm's aftermath.

For those who think their insurance will cover most damages, Michael Hamilton, a Philadelphia-based partner with Nelson Levine de Luca & Hamilton, a law firm that represents insurance companies gives this caveat.

Business interruption claims will be governed by the terms and conditions of the insurance policy, as well as the state law controlling the interpretation of the policy.  Understanding the policy’s insurance coverage will be helpful to the process.  Generally speaking, the more relevant documentation an insured can provide to its insurance company relating to a business interruption claim, the better both parties will be able to assess the merits and scope of the claim.

For those companies in distress today, there are some helpful websites.

Small businesses New York, New Jersey, Connecticut and other states impacted by Hurricane Sandy can visit the Biz2Credit Hurricane Sandy Page.

To help small business recovery, Biz2Credit is providing:

  • Free registration and 1 GB document storage on
  • Information about SBA Disaster Loans and free assistance in filing the forms properly.
  • Links to FEMA resources and other useful websites
  • One free month of financial consultation by a Biz2Credit case manager ($499 value)
  • Access to Biz2Credit's proprietary BizAnalyzer, which provides small business owners with a financial snapshot of their companies and recommends ways to increase credit scores and lower their interest rates ($99 value)

 "While SBA Disaster Loans are usually processed quickly, small business owners may have immediate cash needs to pay for recovery costs, normal working capital, and payroll.  There are many lenders who are willing to grant loan requests almost instantaneously," said Rohit Arora, CEO of Biz2Credit and one of the nation's leading experts in small business lending. 

Additionally, a number of lenders that specialize in rapid approvals of funding requests, such as merchant cash advance companies and factors, have agreed to waive their first month's payment to borrowers who work through Biz2Credit.

"Many small business owners don't have the wherewithal to argue with their insurance companies over what is covered, nor do they have a lot of time to wait for their claims to be processed.  Those who need money quickly can get it from the lenders in the Biz2Credit network," Arora added.

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