Hurricane Sandy, or “Frankenstorm” as it’s been nicknamed, is barreling down on the east coast this week. Home owners and business owners are boarding up in anticipation of a monster of a storm that is expected to last for up to a week.
We never expect anything like this to happen, but the truth is that it does. The same thing can happen with your business, so you should prepare for it now. As a manufacturer I did think to prepare in case anything happened to the factory, like a typhoon or political upheaval. But I didn’t anticipate the price of oil going up so much (affects the price of plastic and shipping) or how bad the economy would become (not just here, but around the world).
Here are some things to consider when preparing for a natural disaster or one that hits your business:
- Be Prepared – Industries change, govt. regulations change, economies change, and consumer’s tastes change. Think ahead and make sure you are innovating for the future. Don’t put all of your eggs in the same basket. Stay on top of what is happening, not only in your industry, but in other ones as well. Make sure you have the proper insurance for your particular business, like disability, key person disability, key person life insurance, property insurance and liability insurance.
- Have Plenty of Cash – Companies run into trouble when they run out of cash flow. Keep a sharp eye on the bottom line and live cheap for as long as you can. When times are good there’s a tendency to want to run out and spend that money on high priced trade shows and advertising. Keep it lean and keep the cash flow flowing.
- Maintain Good Communication – Make sure you are never too busy to stop and have a good conversation with your employees, customers, and vendors. And make sure the lines of communication are always open for them to be able to talk to you about anything that’s bothering them. And do this often before any problems arise.
- Be Ready With Plan B – If you are finding that the path you’re taking isn’t working, be ready to change course. When Netflix first launched, they were basically a brick and mortar video store without the brick and mortar. But the one thing customers still complained about were the late fees. So, midstream they changed their business model to include no late fees, and that’s what made them unique and successful.
- Have a Good Exit Strategy – Have you thought about what you plan to do with your business in the future? Maybe you want to run it until the day you die, maybe you want to expand, pass it down to your kids, or even sell it. A lot of what you do with your business today will affect it down the road. Start thinking about the future now.
Don’t wait until a storm hits to start thinking about what you’re going to do. Plan ahead and be ready.