We have now entered hurricane season. The National Oceanic and Atmospheric Agency predicts a range of 13 to 20 named storms. Six to 10 of them could become hurricanes. While an area of weather spread across Campeche Bay could turn into a tropical depression by the middle of this week, there is no time to panic about the weather. It’s time to plan.
If you are a business owner, are you prepared for disaster? It was the subject of the lunch of the Chamber of Commerce of Calcasieu Ouest last week. Kimberly Thomas of the Louisiana Small Business Development Center was the guest speaker.
Thomas said being prepared for disasters means having the right digital documents / files immediately available to apply for loans, grants and other assistance. It also means having the right business insurance coverage and knowing exactly what the policy covers and does not cover, including deductible expectations.
Thomas’ speech began with an alarming statistic: 40-60% of small businesses never reopen after a disaster.
“Disasters refer to hurricanes, ice storms and floods,” said Thomas, “but a disaster can also be a fire, low income, a pandemic, death or disease”.
She is in a unique position to provide advice to small business owners, not only because of her vast experience in lending, but also because she has seen firsthand the challenges faced by business owners. company after Hurricane Laura. They weren’t ready to ask for the financial help they needed, whether it was a loan, a grant, or some other kind of help available. Some didn’t even know what they needed.
“A lot of these applicants were creditworthy, but we weren’t able to help them because they didn’t have the documents they needed,” Thomas said. “If you’re relying on your tax preparer or CPA for these documents, now is the time to have a conversation with them. “
Business owners need to find out how these professionals save the appropriate documents and how these documents can be made accessible.
“Guess what, your accountant or CPA also lives here and will be discharging as well,” she said.
Thomas said only one in five business owners spend time preparing for a disaster, while large companies spend 10 days a month.
Thomas lived in Houston and had him moved to Lake Charles on August 26, the day before the storm. When it was safe to return, she went straight to work at the one-stop shop for businesses to access expert help at the Southwest Entrepreneurial and Economic Development (SEED) Center.
“It was one of the few places that had access to electricity and the internet,” Thomas said.
(The offices of the Small Business Development Center are located on the McNeese campus.)
“Whether you are applying for a loan from a bank, FEMA, SBA, your uncle, cousin or grandmother, this is what you need to prove that you are ready and willing to take a loan. and pay it back, ”she said.
1. Keep all documents in one place. Save documents in the cloud or on a USB stick. Paper documents should be kept in an airtight container, along with other important documents that remain with the evacuators.
2. Know how an organization is “built” – a corporation, limited liability company or partnership, as well as the percentage that each partner owns – and provide the documents to show it.
3. Know what it would cost to restart the business. Thomas said many business owners, even the most avid business owners, aren’t sure exactly what it would cost to replace equipment, for example. “Let’s say you make ice cream,” she says, “and ask for $ 2,800 to replace your ice cream maker. Then you find out that the actual cost of the machine is $ 3,468.26. Now you are small.
Thomas reminded business owners that if prepared, disasters could provide an opportunity to grow their business. She gave the example of dump truck drivers placed to apply for government loans and contracts and flooring experts.
Is your business
ready for disaster insurance?
Thomas shared examples of commercial insurance that she was not aware of before meeting with state officials after the hurricanes.
1. Home insurance
“Let’s say you have a fire in your house and the insurance adjuster visits you and finds out that you have a home office, but no home office insurance,” she said. “He might refuse to pay for the office equipment lost in the fire because it’s a business. Suppose you have a home tax preparation business and a client finds herself overloaded with paperwork, stumbles, falls and injures herself. This client was not there to visit you at your home. She was there to do business. This would require a separate type of coverage than that provided by your home insurance policy.
2. Key person coverage helps protect a business in the event of the premature death of a salesperson, executive or business owner.
3. Builders’ insurance helps protect construction projects and can help protect construction projects from fire, lightning, hail, explosions, theft, vandalism and natural disasters. It helps protect materials, supplies and equipment on site, in transit and in other locations.
4. Loss of rental income protects homeowners against the risk that a property cannot be rented out due to damage caused by an event covered by the insurance, such as fire, lightning, wind or hail.
Thomas said to make sure insurance agents are licensed to sell what they are selling. Invite the agent to the operation so they know the ins and outs of the business and can recommend any coverage that might be needed. Learn about deductibles. Read the fine print and disclaimers.
Small business owners can avail more helpful services from Thomas and other LSBDC staff, such as confidential advice to existing and potential business owners, at no cost. Experienced and professional consultants analyze the market and find new clients for your business, identify strategies to grow your brand in a growing economy, and turn ideas into profitable business ventures through personalized consulting services.