By Rieva Lesonsky
If you are a small business owner and your business is located in an area prone to natural disasters, you probably already have a disaster plan in place to make sure your business can still function and bring in much-needed revenues. And not only are you and your employees prepared for a flood, fire, hurricane, earthquake or tornado, but your business information is backed up and stored offsite to prevent total data loss and ensure that you and your customers and employees can access information and stay in touch. You don’t want to go straight from disaster cleanup to having to get a small business loan. So you’re well prepared, but what about your suppliers and vendors? If you aren’t able to get products, materials or services, your business will still be in trouble if you can’t give your customers what they want. In fact, a disaster that affects your suppliers can damage your business permanently. Here’s how to protect your company.
Buy insurance. Speak to your insurance agent about getting coverage. Some insurers offer extra expense and business income interruption insurance, which replaces lost business capital when your business experiences downtime due to a covered disaster.
Think ahead. Try to head off a financial disaster, and if possible apply for a business line of credit. That way you’ll have access to capital, if sales are temporarily affected.
Check with suppliers. Don’t be shy in asking your suppliers and vendors what plans they have in place in case of an emergency. Are materials or products set aside at another location? Is there a plan for another manufacturer in a different geographic area to take over their business in case they are unable to meet production quotas? How can you get in touch with them if a disaster knocks out normal communications methods? A well-organized supplier will have a plan in place.
Diversify. To protect your business in case of emergency, use two or three suppliers in different parts of the country, so you have a backup in case one vendor can’t meet your needs. Natural disasters aren’t the only reason a supplier might be unable to work with you—and spreading your business around also protects you if one supplier goes out of business.
Keep talking. Preserving the lines of communication with your suppliers and customers open can help you keep your customers your customers even if you can’t deliver what they want. Immediately notify customers if you think an order will be delayed due to a setback on the part of one of your suppliers. Reassure them you’re doing all you can to get their order to them as soon as possible. Your customer will appreciate your effort.
Offer help. Ask the supplier suffering a disaster if there’s anything you and your company can do to help get their company back on track. Offer to make phone calls, help them set up shop in another space, or even offer them space in your building to do business. The sooner they get back on their feet, the sooner you will too.
Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at firstname.lastname@example.org, follow her on Google+ and Twitter.com/Rieva and visit her website, SmallBizDaily.com, to get the scoop on business trends and sign up for Rieva’s free TrendCast reports