Recovery starts immediately. You can be responding to an emergency and starting to recover at the same time.
When you are ready to start recovering it is important to take stock and look at your options before making decisions about your future.
Some people may decide to exit their business, while others will decide to restore their operations and re-examine their strategy to revitalise their business.
Step 1: Complete the recovery checklist
The recovery checklist will help you identify the actions you need to take in the recovery phase.
Ask yourself if you've:
- Refocused efforts towards recovery?
- Assessed your current financial situation?
- Taken photos and documented all damage?
- Contacted your insurance broker or insurance company?
- Identified any support or assistance you may be entitled to?
- Kept staff and key stakeholders informed?
- Considered priorities, timelines and recovery options?
- Ensured key customers and suppliers are aware of your recovery process?
- Looked at all options that may enable the business to retain staff?
- Restored your computer backups and other necessary information?
- Analysed the potential demand for your services post-crisis?
- Adjusted resources (staff, finances) to bring the business up to normal operating levels?
- Considered exiting the business?
Step 2: Take stock
Following a crisis, the immediate reaction of many business owners is to restore their business back to normal operating levels as soon as possible.
However, a post-crisis environment is anything but business as usual. Therefore, it is important to take stock and reflect on your options before taking the next steps.
Assess the impact
Assessing the impact of the crisis on your business will help determine your options moving forward. The assessment should identify the level of investment required to recover.
Three key areas to assess:
One of the main impact of a crisis on tourism businesses is the disruption caused to business operations.
Building upon your initial impact assessment undertaken during the response phase, identify and document the impacts that have resulted from the disruption of business functions and processes.
Impacts to consider:
- lost sales and income
- loss of forward bookings
- cancellation of existing bookings
- delayed sales or income
- increased expenses, including overtime labour, outsourcing, clean up costs
- regulatory fines
- contractual penalties
- customer dissatisfaction
- delay of new business plans.
As part of this assessment, you should also identify the time-sensitive or critical business functions and the resources that support them.
Knowing the financial health or financial position of your business will help you determine whether you:
- can afford to get your business back to the way it was before the crisis and how quickly you can do this
- should expand, shrink or even close your business.
Assessing the financial health of your business can also assist you when making insurance claims.
Collect financial records
Collect all business records that have been salvaged or kept off-site so that you can begin to evaluate your financial position. Where there are gaps in your records, consider alternative sources to help you reconstruct your finances. You may like to seek assistance from your accountant at this stage.
CPA Australia Disaster Recovery Toolkit provides information on how to manage your finances after a crisis.
Monitor cash flow budget
It is important to keep monitoring your budget after a crisis. Compare your actual to estimated results each week, fortnight or month and revise the budget when necessary.
To achieve a satisfactory cash flow budget requires revisiting the budget several times to allow for changes in:
- sales and pricing
- bookings and deposits
- the timing of purchases of stock
- the amount needed for borrowings.
If your property has been damaged or destroyed, it's important to conduct a damage assessment. This information will dictate your recovery priorities.
Don't commence cleaning up until you have contacted your insurer and considered your obligations under health and safety legislation.
Begin by preparing a list of destroyed or damaged items, along with their estimated replacement costs. If possible, include photos of the damage.
Make a list of key equipment, stock and other activities of the business that need to be operational for the business to reopen or get back to normal operating levels. If any of these items have been salvaged during the clean-up, store them in a safe and secure place.
Contact your insurance company and discuss:
- your damage assessment
- level of cover
- how quickly your claim can be processed
- how much and in what form a claim will be paid
- a date when an insurance assessor will visit to assess the damage.
- keep your business and personal disaster loss records and receipts separate
- save all receipts for repairs and replacement of property
- take photos before cleaning up, and make a list of everything that has been damaged.
Step 3: Make tough decisions
After any crisis, you should take the time to reflect on how the event has impacted not just your business but also your personal life. This is the time when you would need to decide whether you really want to restart or exit your business.
It can be useful to think through the following questions:
- What will my bookings and turnover be like in the coming months?
- What will be my staffing levels in the next six to 12 months? Can I afford to employ the same number of staff? Do I have enough staff available to work?
- Do I need new products or experiences to attract visitors to the area again?
- Was I happy running my business before the crisis?
- Am I prepared for the extra demands that will surface during the recovery and add burden to my personal life and finances?
It might be useful to seek the help of a trusted adviser, such as your accountant to help you make these decisions.
After a crisis, you may also need to decide if you can continue to employ your staff in the short, medium and long-term. Find out how to manage staff after a crisis.
Step 4: Restoring operations
Clean up and repairs
Before proceeding with the clean-up phase after a crisis, it is important that you understand your responsibilities to your staff and others on site under the Health and Safety Act.
Under the Health and Safety Act, you must take reasonable care to protect staff and people on site from potential hazards or risks while they assist you in cleaning up damaged or destroyed property and equipment.
It is also important to remember to contact your insurer before commencing any clean-up operation.
Contact your insurance provider
Always contact your insurance provider before you begin any clean up operation. This allows the insurer to see the full extent of the damage, as well as start the claims process.
If your home or business property is damaged and requires temporary repairs to prevent further damage then you can do these. However, do not conduct any major repairs before contacting your insurer.
Don't be concerned if your insurance documents have been lost or damaged. Insurance companies keep records electronically and only require the policy holder's name and address in order to locate a policy.
If your assets, such as furniture, clothing or carpets are damaged because of an insurable event, remove these items as part of the general clean-up. If possible, keep them in a safe location so they can be inspected as part of the claims process.
WorkSafe Victoria has prepared resources that provide advice on staying safe during recovery including clean up.
- View information on recovering from a bushfire
- View information on floods and other natural disasters
- View information on infectious diseases
Consumer Affairs Victoria
Consumer Affairs Victoria can provide advice on business recovery in a disaster. This includes advice on special laws for emergency repairs and building issues.
In the wake of a disaster, protecting what's left of your assets from looters may be necessary. If several businesses are located in close proximity, you could work out a shared security arrangement.
Recover your IT systems
If you have sustained damage to your Information Technology (IT) systems, you may need to purchase replacement systems.
Once you have your hardware, the next step is to retrieve the backup data you have, either stored offsite or in the cloud and restore it back onto your systems. If your backup alternatives were also damaged, you can engage in a professional data recovery specialist to try to recover data from your damaged computer.
If you do not have one already, consider creating an IT Disaster Recovery Plan and add it to your business continuity plan.
This includes compiling an inventory of hardware such as:
- wireless devices
- software applications