According to the Red Cross, over 40 percent of small businesses cannot reopen their doors after a disaster strikes. The Philly Floor Store has transcended that fate — we’re extremely lucky to say that our operations are nearly back in full swing after only two months.
But part of the reason why we were able to overcome the fire in such a short period of time is that we had planned for disaster. All of our attention to detail has helped immensely in the weeks since our warehouse burned down.
This is the second in our series of blog posts about the lessons we learned as a team in the wake of the PFS fire. You can read Part 1 here.
Here are some more tips to help business owners prepare themselves for disaster.
Don’t assume that someone else will cover your losses
Make sure to cover all your bases.
If you’re a hardwood floor contractor, you should insure your own equipment in your name, even if you work for someone else. Don’t assume that your employer’s insurance will cover any damage or theft.
For insurance purposes, it’s not a bad idea to take pictures of your truck and its contents at least once a week, if not daily, to ensure that all of your equipment and materials are properly documented. If you’d like to go the extra mile, you could even install a video camera in the back of your van to cover for any thefts.
When you’re devastated from a huge loss, it’s easy to forget certain details and accidentally undercut your compensation from insurance. If you take steps now to cover yourself for loss before it happens, you won’t have to retrace your steps.
Rid yourself of liabilities
Disasters don’t just take the form of hurricanes, earthquakes, or fires. A lawsuit filed against your business can prove catastrophic by putting you in the red and damaging your credibility.
One area of potential liability that’s especially relevant to hardwood floor contractors who employ other people is workers comp. To avoid spending time in court, familiarize yourself with the workers comp requirements in your area and make sure to follow them. A lack of knowledge could get you in trouble with the law.
If you have at least one employee — and one is all it takes — you are required by Pennsylvania law to have workers compensation insurance, according to Sean Deviney, Vice President of Body Borneman Assoc.
According to Sean, under PA state law, if a 1099 contractor only works for one company, they have to be covered by that company’s workers compensation policy.
Sean says that a lot of business owners will try to “beat the system” by just hiring subcontractors and failing to take out workers comp insurance. But if someone gets injured on the job and you don’t have workers comp, you could be in trouble.
To make sure that you know about all of your company’s possible liability issues, it’s best to talk to an attorney.
Schedule data backups for crucial recovery
As a small business owner, your data — including files and documents, and contact information for your employees, clients, and suppliers — is one of your most important assets. A total loss of years’ worth of data due to a server blowout, natural disaster, or a coffee spill would be devastating and could even prevent you from opening your doors again.
Plan ahead by backing up your data in multiple off-site locations, such as external hard drives and through cloud-based services like DropBox. If possible, schedule daily backups to make sure your backed-up data is current, up-to-date, and ready to kick in should disaster strike.
Although we had a data recovery plan in place and had tested it just a month before the fire, we did have a hiccup with regard to one of our internal shared drives. We weren’t able to fully recover our files.
We were running out of hard drive space on our back up unit, so we had to manually delete old versions of the backups to make room for new data. These manual changes ended up corrupting some of our data and caused us to lose a few weeks’ worth of backup files on one of our shared drives.
The best way to avoid something like this is to ensure that you have ample space for backups wherever you are storing your data. For best results, have an IT professional assist you with these tasks.
Avoid the “It won’t happen to me” mindset
Don’t fall into the trap of thinking that you’re not a single hurricane or theft away from going out of business. Expecting the unexpected, and planning for it, is the only thing that will allow you to reopen your doors after a catastrophe.
Katie McCormick, a PFS employee whose husband, Sean, is a hardwood floor contractor, talks about how the fire changed their mindsets about documenting property for insurance purposes:
“Sean and I have discussed reviewing our insurance policy and making sure it is up to date…because let’s be honest, who really reads the insurance booklet from front to back? Most people, including myself, have a mindset of ‘It won’t happen to me.’”
It’s important to pay attention to the details that we tend to gloss over, because they could make the difference between restoring your business and shutting the doors for good.
“On the business side, Sean would like to reevaluate his insurance policy as well and make sure all the tools he has purchased over the last few years are listed and insured,” Katie says.
From a homeowners perspective, Katie says that the PFS fire changed her outlook on the tedious task of taking pictures: “I did originally take pictures of the house when we moved in and stored them on a disc to have if we ever needed them for insurance purposes. But as time goes on and life gets in the way they have not been updated in the last few years, but now given what has happened I will definitely take up to date pictures.”
It may seem silly now to review your policies and take pictures of your property, but if something happens and you’re covered for it, all of your diligence will be sure to pay off.
Taking these steps now will pay off later
To sum it up, here are some quick tips to prepare your business for a disaster:
- Cover your bases. Even if you work for someone else, make sure to take out insurance policies to cover your own equipment and property.
- Make sure to get rid of all your potential business liabilities, like lack of workers comp. Familiarize yourself with the laws in your area and consider consulting an attorney to avoid landing in court.
- Schedule frequent backups of your company’s data and files in an offsite location. Enlist an IT professional to help you with these tasks.
- Avoid the “it won’t happen to me” mindset. Review your home and business insurance policies in detail and make time to take updated pictures of your property.