The last few months of 2017 have been plagued with natural disasters. Hurricane Harvey, Hurricane Irma, and the wildfires of Northern California have wreaked havoc on countless homes and businesses in their paths. According to the Federal Emergency Management Agency (FEMA), almost 75% of small businesses do not have a disaster plan in place, and 40% of these businesses never reopen their doors following such a disaster, due to the devastating financial loss.
Whether you were affected by these disasters, or had a personal disaster such as an electrical fire or flooding due to broken pipes, the loss can be debilitating. Taking these steps below can help you get moving on the path toward rebuilding your restaurant.
Contact your lender and insurance company first. While you may want to rush right in and begin the clean-up process, it is important for your insurer to assess the damage first, as they need to see everything that was impacted in the disaster to issue you an accurate estimate. Be sure to let your lender also know of your situation, as many large financial institutions will work with you to defer payments until you are back up and running again.
Then contact your vendors and distributors. Most contracts have a “force majeure” clause that can temporarily relieve you of contractual obligations during a national disaster.
Look for programs that offer assistance. Hopefully you have the proper insurance to cover damage done to your property. However, there are certain perils that you may have never foreseen. For example, floods are not covered in a basic property insurance policy, yet many businesses outside of known flood zones experienced extreme flooding during Hurricane Harvey. The good news is that if your area is located in a declared disaster area, you may be eligible for assistance from the Small Business Administration (SBA). If the SBA determines that you are eligible for assistance, the interest rates are low (less than 4%), and you can pay off the loans for up to 30 years. After large disasters, the SBA also offers business counseling services at no charge to help businesses recover.
Begin the clean-up process. The clean-up process will most likely be long and tedious. When possible, a professional crew should be used. Salvaging what you can is important, but be aware there are strict guidelines put forth by the U.S. Food & Drug Administration (FDA) on equipment and structural surfaces that are salvageable. Check here to find useful tips and guidelines to help in the salvaging process.
Communicate openly and often. Be sure to let your employees and the community know that you are rebuilding, and keep them updated along the way. This should be done verbally with employees – especially your strongest players that you don’t want to lose. You can easily update the community via your social media outlets. Indeed, out of the devastation caused by a natural disaster, one positive outcome is that they bring communities together and make them stronger. Locals want to begin to rebuild the community by supporting local businesses, so let them know when you expect to be ready to serve them again.
Think beyond simply “replacing”. Depending on the extent of your damage and how your insurance settlement pans out, now may be the perfect time to rethink every aspect of your restaurant. Are there things that you wanted to change but were unable to due to financial constraints, or you could you not afford to shut down your restaurant for construction? This could be the time to make major changes to help your business thrive in the future. Move those wait stations away from the bathrooms, and rearrange the kitchen stations. Perhaps you could completely rebrand or change locations if it’s been on your mind but you have been hesitant.
Preparing for the next time. Make sure that you have proper plan should you find yourself in another disaster. What lessons did you learn this time that you want to avoid next time? Document everything you can. While this event is top of mind now, will you remember 15 years from now that you regretted not interviewing more contractors than you did?
Consider your insurance policies for the future. Perhaps you have done the math and feel strongly that the fire in your area was a highly unlikely fluke, so you do not feel that the monthly dues of flood insurance are worth it. In this case, you might consider Business Interruption Insurance that would cover some of the expenses associated in running your business, should your restaurant be shut down for an extended period.
No matter the policies that you choose, be sure to keep your important documentation safe by saving a copy of them in the cloud, or at a different location from your business. These documents are critical during the recovery process, and you will need quick access to them.