The effect of devastation that Sandy caused to the countries situated along its path, especially US, is still very fresh. The degree of damage is evident from the aftermath. Developing a disaster preparedness plan for businesses had already been tackled in the previous post. Well, that wouldn’t be very much applicable in the current state of small businesses in US. What is more important as of the moment is proceeding to the recovery process. No matter how much loss a business had because of Sandy, it can still be remedied if and only if businesses would take the initiative to stand up and do something.
1. Damage Assessment. Assessment is the very first thing that small businesses have to do before planning out on how to start over and whatnot. There has to be the identification of what equipment were totally destroyed or just damaged. The database is also a very important thing that should be looked into. A minimal loss of data could mean so much. Seventy percent of small businesses (DTI/ PricewaterhouseCoopers) that experienced a major data loss aren’t able to go on with their operations forever. There also has to be an estimation of the total cost of reoperation and how much has to be reinvested.
2. Market Reach. There will surely be a shake in the market of small businesses especially those that are local considering that it’s not only the businesses that have been affected but the entire community. In this case, alternatives to resources have to be sought. It should also be considered whether or not a business could extend the market reach to areas not affected and whether or not it is just best to serve the affected community.
3. Customer Spending. Shifts in how consumers and customers spend are expected. Of course, there will be less demand on luxury products and high on medical and grocery products. After catastrophes, some businesses would have a hard time reestablishing because of this shift. On the other, because of the rebuilding efforts, some businesses would be on high demand. During this period, businesses have to consider their own customer spending and see if there’s a call for immediate resumption of operations.
4. Financial Position. It is very essential for any business to determine its financial position. What is the current financial picture? What amount of money will the business need to make it operational? Is a business eligible for Small Business Administration or SBA disaster loans and other forms of assistance? If the business has insurance; what will be covered and how much? These are the fundamental questions that have to be answered.
Below are additional videos from the United States Small Business Administration’s site:
http://www.youtube.com/watch?v=pjZmcDVVtQM
http://www.youtube.com/watch?v=LXnLY5UbsY0
Application forms are available here.
5. Tax Relief. Small businesses affected by catastrophic events have the possibility of obtaining tax breaks from the Internal Revenue Service, or its equivalent to other countries, to offset losses, especially if the business is located in presidential declared disaster areas. Options include claim deferred gains for eligible replacement property, casualty losses and tax extensions. IRS then has to be immediately contacted to know about all the information and the entire process on filing for eligibility.
6. Network Communication. A business has to also see how the disaster has affected those that are connected to it, e.g., suppliers, manufacturers, employees, customers, etc. These bodies have to be contacted immediately to inform them of the damage. They could possibly help the business recover by giving support. Or the suppliers of the business, in order not to disrupt the flow of products, could be the ones to distribute them to the customers.
*Note: The above steps are derived from Darrell Zahorsk’s identified processes to recovery. Being a small business expert, Darrel has been a speaker, author and consultant whose work has been recognized in Fortune Innovation Blog, Harvard Business Working Knowledge, and other media. Currently, he provides SEO or Search Engine Optimization services to companies such as the makers of BlackBerry smartphones, Research in Motion and small business.