Hope for the Best or Have a Game Plan?
Nov 18, 2013
I recently saw a billboard that said if you don’t have a disaster plan, to hope for the best! Man that really is true, unfortunately, I think that is a lot of people’s plan. Do you personally or your business have a disaster plan in place? Yesterday we had some high winds and possible tornados in our area causing some major localized damage. Thankfully myself nor anyone I know was directly affected. However, it sure could have been worse. I hope no one reading this blog or anyone they know was affected either. I know there were storms all over the country. Don’t be one of those people who have to learn the hard way. Have a disaster plan in place before disaster strikes and know what you need to do.
Obviously if a disaster would take place, some cost would incur to return things to working order. How would you account for those costs? Hopefully those are one-time expenses that you can just expense and never have to do again. Regardless, how are you going to over your costs?
If you live in tornado alley or somewhere that gets a lot of hurricanes or earthquakes you may be having these expenses a lot more frequently. You of course would not change your standards necessarily for these costs, but if it is something that happens every year or every few years you need to make sure you can cover the costs. If your margins are not large enough to withstand these kinds of expenses that are somewhat reoccurring you will not be able to stay in business.
Even if a disaster happens only once and you do not have enough profit or the ability to finance, then you too may not be able to stay in business. Most organizations have insurance to cover these types of incidents, but you still have to stay operational if possible during rebuilding, or whatever other efforts may be necessary.
Natural disasters are a very tragic thing, do not be left without a game plan! Chances are if your business has been effected, the homes of those that work for you have also been effected. Do not add to the devastation by having to close your business.
Categories: Cost Accounting