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    6 Replies Latest reply on Dec 23, 2012 12:13 PM by EVA7777

    Weather Disasters affect small businesses

    Kirsten Clark Adventurer

      Weather disasters can devastate small businesses by not having enough cash when damages and closures occur. In my opinion, a Cash Flow Projection can help businesses understand their monthly cash flow, make necessary changes and set cash aside for emergencies.
      What are your suggestions?


        • Re: Weather Disasters affect small businesses
          Moderator Ilona Ranger

          I agree with you that in the 'Best of Worlds' it would be good to have enough cash on hand to survive, rebuild or just get by after a weather disaster. Sad thing is most small businesses survive like households form one month to the next without being able to put much aside for a rainy day.

          Some small businesses might have insurance to cover their cost in case of weather loss, but not all so yes making necessary changes should probably be made to set some funds aside for any emergency....would you have any advice on how to go about this or do any of our other posters have so advice on this subject?



          • Re: Weather Disasters affect small businesses

            Hi Kristen,


            Setting aside for a rainy day is the smartest thing to do without a doubt. When we opened doors, we had the opportunity to receive a line of credit from our bank. It was a business decision to only use this credit in case of emergencies but only after all of our set aside funds had been exhausted. I have to say , that was the wises decision we ever made. Not only did it give us confidence as a company, but it also circumvented panic during those tough times.



            • Re: Weather Disasters affect small businesses
              EVA7777 Adventurer

              Having an "emergency fund" is essential regardless of the size of the business or where they are located. It does not take a Weather Disaster to severly impact a business. We recently lost a client due to a large scale road construction project that forced traffic away from their store and resulted in a 70% drop in sales for over 10 months! The owner was not prepared for such a drop in revenue even though they were aware of the project 24 months in advance! Planning for trends in revenue and expenses is vital for businesses of all sizes. Every business should have some cushion in place whether it be a savings account (emergency fund) or a line of credit that is designated to be used only in such a situation. However, some businesses abuse the line of credit and drain the funds before they are truly needed.


              Jennifer King, MSA