5 Steps To Help Your Business Recover From Disaster
Has your business been impacted by the Queensland or Victorian floods? Are you struggling with information overload?
Vantage Performance has helped many businesses navigate their way through periods of crisis. Each fortnight we will issue a step-by-step guide, with practical tips and examples, on where business owners should be focusing their recovery efforts.
With the salvage effort well underway, now is the time to prepare your business recovery plan. This five point business recovery strategy can form the basis of your plan:
1. Lodge a claim with your insurer. Many people are confused as to whether they’re covered or not in a crisis such as this. Don’t assume – the best way to ensure you are assessed is to lodge a claim with the insurer. An assessor will be assigned to inspect your property and contents/stock. They may also provide relevant safety advice to you for re-entering the property and when you can resume trading.
If you have not been contacted by your broker, then contact them immediately as they will also need to be liaising with the insurer regarding your claim.
2. Forecast short term cash flow – cash flow forecasts should be a key management tool in any business, but in situations such as this they are critical. Preparing 13 or 26 week cash flow forecasts under both best- and worse-case scenarios will assist in quantifying the flood impact on your business. It will also help highlight periods of cash shortage in time for you to implement a strategy to mitigate these shortages.
A basic cash flow forecast will take a few hours to create and can be prepared on an Excel worksheet. If you don’t have access to a computer don’t be afraid to ask family, friends or colleagues if you can use theirs. The devastation of the Queensland floods has brought out the best in people and you will be surprised how much support will be offered to you.
If you’re unsure of how to go about preparing a cash flow forecast please read my blog How To Create A Cash Flow Forecast for a step-by-step guide.
3. Prepare a 100 day work plan – this detailed plan which clearly defines and prioritises what actions need to be taken, by whom and when will provide a solid basis for your rebuilding process. It will also provide a measure of your achievements.
At this stage of the rebuilding process, every day is critical so make sure you review and update your plan every morning.
If you’re unsure how to design a work plan please use the attached template as a guide: 100 Day Work Plan
4. Communicate with your staff – they will be concerned about their continued employment with the business so communication is essential. Communication should be timely, relevant and clear, and cover both business and personal issues. Check whether or not your staff have been personally affected by the floods and be compassionate.
When it comes to your business, tell them what impact there is on the business, outline your 100 day work plan, identifying their roles within it and take any questions they may have.
Finally, promise to keep them well informed and identify the point of contact in the business for anyone with concerns.
5. Contact and update your financiers – providing your financiers with regular updates, including your cash flow forecasts and 100 day work plan, will reassure them that you are taking a rational and organised approach to the rebuilding process.
Financiers are adopting a compassionate approach to flood impacted businesses and will appreciate your proactive approach to keeping them informed.
Please stay tuned for the next instalment of our rebuilding guide. If you have any business recovery tips to offer, or stories to tell of how a disaster impacted on your business, we’d love you to share these.
Michael Fingland is executive director of the Turnaround Management Association of Australia and founder and Executive Director of Vantage Performance. Michael is a Chartered Accountant with more than sixteen years experience in corporate turnaround, profit improvement and corporate restructuring. Vantage Performance specialise in improving business performance and executing corporate turnarounds. We work with companies going through major growth or change, helping them to improve profit and performance. We also advise underperforming companies or those in financial distress, helping improve cash flow, profitability and value of the business. Vantage Performance was awarded Turnaround of the Year in 2008, 2009 and 2010 by the Turnaround Management Association of Australia for its work with troubled companies.