3 Ways to Prepare Your Business for the Unexpected

(And How to Avoid Meteorite Damage)

Amy R. Connolly, Writer
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When severe weather hits — hailstorms, hurricanes, tornadoes and blizzards — roofing contractors spring into action to help owners of homes and businesses make immediate repairs. But what if that severe weather impacts the roofing contractor’s own home or business? What if the debilitating crisis isn’t weather or roof related at all, but instead a technology failure that wipes out years of data or a pandemic (like COVID-19) that shutters companies for months?

While roofing contractors are always ready to help others in a crisis, they also must be prepared to tackle their own emergencies. The key to weathering any storm — naturally occurring or human-made disasters, personal or business emergencies, or public or individual health crises — is preparation.

Craig Webb, president of construction supply consulting company Webb Analytics, says roofers must prepare for both the long and short term. Secure company records. Buy insurance. Protect business operations like a meteorite will strike at any second.

“It makes sense to plan for the disasters you can foresee,” Webb says. “As an example, uploading a company’s records into the cloud reduces the likelihood those records will be lost in a flood. Then there are disasters that you just can’t expect, like a meteorite striking Earth. It happened when the dinosaurs were around, so we know it can occur. But I don’t think people spend much time preparing for a meteor.”

Preparing for the worst — perhaps even a meteorite strike — doesn’t make roofing contractors pessimistic or alarmist. Preparation makes them smart.

Disasters of All Kinds

Indeed, if the past months of living through a pandemic have taught business owners anything, it’s that unforeseen hazards abound. Just to name a few:

Natural disasters
Natural disasters that include landslides, earthquakes, volcanic eruptions, tsunamis, fires, tornadoes, hurricanes and floods can last minutes or days and cause damages that devastate livelihoods.

Serious injuries, illness or death
When the owner of a company suffers a serious injury or illness, or dies, the company must be able to sustain itself, even for a short period. At a minimum, bills must be paid, customers’ accounts must be settled and employees need to be supported. Other considerations include the long-term outlook of the business and equipment.

Technical failures and cyber attacks
Some of the most commonly used technology in roofing — including aerial-imaging equipment, and mobile and desktop devices — is prone to being damaged or destroyed. Viruses and other types of malware can also wipe out records and data.

Acts of violence
While terrorism, bombings, workplace aggression and active shooters are not commonplace, business owners must keep in mind a plan of action to ensure that employees are safe.

Anthropogenic hazards
Threats caused by human action or inaction, such as oil spills, pollution and global warming, are considered anthropogenic hazards, which can shutter businesses and cause employee injuries.

In preparing for and responding to disasters, the leading public-safety managers look to a method from one of the most unusual sources — Waffle House.

The Waffle House Way

In 2011, Craig Fugate, then the Federal Emergency Management Agency (FEMA) administrator, coined the term “Waffle House Index.” The informal, color-coded index is based on the restaurant’s reputation for staying open or quickly reopening after emergencies:

  • Green = open with a full menu
  • Yellow = open with a limited menu
  • Red = closed

After operating through multiple public emergencies nationwide, Waffle House has put into place preparedness measures that include portable generators, mobile command centers, employee training and after-action reports to review outcomes and make changes.

Pat Warner, Waffle House’s former public relations director, told the Center for Disaster Philanthropy that two of the most important disaster-readiness procedures are an action plan and clear communications.

“Companies need to do ‘what-if’ scenarios on major threats to their business and come up with a plan to react,” he explains. “Then communicate that plan to your employees. Now remember that the plan just gets you there. You then have to show up right after the crisis and, using the plan, react to the realities the crisis presents.”

Making Things Right Before They Go Wrong

In addition, companies should consider other types of preparedness measures, including:

Protect company finances

To keep a company solvent, business owners should continually monitor their accounts receivable. The roofing consulting firm Cotney Consulting Group recommended that companies identify customers who have a pattern of paying bills late and develop a plan to reduce risks. The plan should include having a single person dedicated to invoicing, collecting and monitoring payments at least once a week.

“Make sure all payment terms are clearly outlined in writing and agreed upon with a signature before the commencement of any work. Your contract terms should include a requirement for an up-front deposit, with the balance due upon receipt or soon after that,” the firm says in Roofers Coffee Shop.

Ideally, roofing companies would also have an emergency fund to make it through a financial downturn. At a minimum, companies should know their run rate — the amount of time they can operate before running out of money.

Check insurance coverage

To mitigate risks, smart roofing business owners have insurance coverage that protects their company and employees. However, even the best of policies may not offer the protection needed.

The gold-standard policy for business — business interruption coverage — typically does not cover pandemic losses. Brad Moody, president and owner of the Denver-based Moody Insurance Company, told Roofing Contractor Magazine that business owners who suffered losses during the pandemic should file claims anyway because the issue might go to court.

“You’re seeing some class-action potential with some of the wording on these policies, so we’re recommending our clients to file no matter what and at least let the insurance companies respond to those,” he says.

Other insurance coverage essential to roofing businesses includes employment practices liability, umbrella liability and cyber insurance.

Build succession and contingency plans

A succession plan and contingency plan are more than just determining who will run the business if the owner falls severely ill or dies. The plans are aimed at protecting company assets and helping employees through a transition while keeping business operations smooth.

Any first step in planning should include answering some tough questions about the future. (For example, will the business shutter or will it be sold to a family member?)

From there, important decisions must be made, including choosing the method for the business transfer (a trust vs buy-sell agreement) and determining the company’s value (asset based vs. income based).

Ultimately, business owners must recognize that emergencies and unanticipated hazards are a part of life. In his book Only the Paranoid Survive, former Intel CEO Andy Grove says businesses of all sizes must plan the way a fire department plans.

“It cannot anticipate where the next fire will be, so it has to share an energetic and efficient team that is capable of responding to the unanticipated as well as to any ordinary event,” Grove writes. “It is your responsibility to guide your company out of harm’s way and to place it in a position where it can prosper in the new order. Nobody else can do this but you.”