Another Prep Article—This Time for Disasters
The weeks and months immediately following a natural disaster can be a busy time for paint dealers and contractors. After homeowners and businesses clear out damp wood after a flood or bulldoze after a tornado, it’s time to rebuild—and repaint. As a result, disasters can lead to a sudden burst in demand that can bring new and sudden challenges to your business.
You may find that you need to make a large order to replenish your inventory. You may need to hire additional staff or train existing staff to assist customers who are searching for paint during one of the most difficult times of their lives. If customers are located far away, you may want to invest in a delivery truck and driver to make deliveries and make your customers’ lives easier.
While your business experiences this sudden influx, you’ll also want to make sure that you are equipped to maintain sound financial standing for your business, especially in the way you manage the massive paper trail that comes along with the increase of purchase orders, payments, and hiring. The busy and frenetic periods that follow disasters can put a strain on ordinarily efficient and organized businesses, and failing to prepare creates openings for you to make uninformed decisions that could put your business at risk. To avoid this, make sure you’re not operating as if any of the following three myths are true.
Three Post-Disaster Business Myths Dispelled
Myth: An increase in business is always good.
Reality: If you don’t prepare for changes after a natural disaster, you may find some unwelcome surprises. Even though many homeowners and property managers will need paint after a disaster, poorly managing this influx can have a negative impact on your business. If you order inventory with funds you don’t have or hire someone whose payroll you won’t be able to meet, your business will suffer. To weather unexpected increases in demand, make sure your financial and inventory records are always kept up to date so you can easily ramp up after a disaster.
Myth: The only time you need to interact with your accountant or bookkeeper is during tax season.
Reality: Sharing financial records with key stakeholders can help you make decisions faster. If strategic partners have access to the most up-to-date financial records, you won’t have to worry about whether purchasing extra inventory will put your business in the red for the month. When your bookkeeper or accountant is able to access your accounts payable and receivable, you’ll be able to give them a call and ask how much you can afford to invest on inventory in any given month.
Myth: Businesses that help with disaster recovery already know how to recover.
Reality: Your paint business is as likely as any other business to suffer a natural, cyber, or accidental disaster. Even if your business isn’t located in an area prone to natural disasters such as floods, fires, tornadoes, or hurricanes, fluke disasters can happen at any time. Issues such as a break-in or an accidentally spilled glass of water can destroy both physical records and digital backups. For that reason, one of the ways you can help your business prepare for a disaster is to make sure all of your financial records are backed up to a cloud-based accounting tool.
Preparedness Makes the Difference
No matter where your business is located, the best way to minimize the negative impact of a disaster is to prepare. Now is a great time to consider how your business currently manages its financial records—and whether your existing system can handle changes in demand or a natural, cyber, or accidental disaster.
Kevin Miller is CMO of The Neat Company, which focuses on developing powerful, cost effective tools for small business that help with expense management, automated bookkeeping and document organization.