In Overcoming Crisis: Picking Up the Pieces, it is commendable that Dericus was able to find a temporary workplace and was able to maintain relationships during the reconstruction. Due to him proactively taking a service mindset and using technology, he minimized the risk of not being able to meet his clients’ needs. His scenario highlights the importance of minimizing potential financial risk. Business continuity planning is as important as initial business planning to an entrepreneur. To mitigate risk in the event of an unexpected disaster a business owner should have:
- A written business continuity plan that addresses the availability of resources such as information equipment (technology), financial arrangements, services, personnel, and accommodations (workplace).
- Business continuity or business interruption insurance, which is an option added to a business liability insurance policy. A business liability policy generally replaces tangible items, such as supplies, inventory, and equipment. The goal of a business continuity policy would be to provide for lost profits, as long as the business owner has documentation of current net income. The policy would provide for payments to employees when there is an interruption in business.
Dericus did a great job of executing the steps to keep his business running, but it is my opinion that a written business plan and a business continuity insurance option could have minimized the amount of time business operated off site and potentially saved the lost employee.
Related articles
Overcoming Crisis: Picking Up the Pieces
Tips to Protect Your Business from Sudden Death
Tips to Limit Your Business Risk
Raeneice V. Taltoan, Esq., CFP®, R.V. Taltoan, PLLC, rvtaltoan.com
(Disclaimer: any legal perspective shared in this article does not create or constitute an attorney-client relationship nor convey or constitute legal advice.)
[…] ← Previous Next → […]