Every business owner knows that life throws curve balls. Sometimes they knock us off balance, but we can bounce back pretty easily for the most part. Then there are the disasters — the natural or man-made whoppers that we didn’t see coming. We won’t know when or where they strike, but how we react in the days that follow will decide the company’s fate.
Here are stories of how three businesses met disaster head on — and triumphed.
Life after Hurricane Sandy
It was a day Bob Blanda will never forget.
On Oct. 29, 2012, Superstorm Sandy made its grand entrance in New York, flooding streets, tunnels and subway lines. Fierce winds of up to 115 mph cut power lines and ripped structures apart.
The entire Eastern Seaboard felt the storm’s fury. In all, 24 states were affected, with New York and New Jersey hit hardest. U.S. fatalities totaled 125. At $65 billion in damages and economic losses, Sandy was the second costliest hurricane in U.S. history.
For Blanda, a pool professional who lives in New Jersey and owns a Brooklyn-based retail/building/service firm, the disaster was a test of his preparedness and resourcefulness.
Fortunately, because he and his wife live a full 20 minutes from the water, they were spared home damage.
“We did have a power outage for 12 days,” says Blanda, president of Mill Bergen Pools Center. “I’d had a gas generator built into the house, so I had a refrigerator, Internet and TV. The house quickly filled with family and friends who stayed there for a while.”
He adds with a laugh, “They went through my wine quickly.”
His business, however, was only three blocks from an inlet of Jamaica Bay. The building escaped water damage only because Blanda had installed pumps hooked up to a generator. So when Sandy struck, water that entered the Mill Bergen Pools Center was pumped out and none of the stock affected.
His customers, however, were left reeling. Those along the waterfront had flooded basements. Others’ homes were totally ruined ined, and many lost cars to water damage. His crew came to the rescue of customers whose pools were salvageable. For submerged inground pools, they removed the water, then scrubbed and pressure-washed. Many vessels required liner replacements.
But for other customers, pool repairs were out of the question. They had to address their homes and cars first. Then they could think about fixing their pools.
As if that weren’t enough, all the new-pool projects Blanda had scheduled — 30 to 40 — were put on hold after the storm. How did he deal with that financial blow?
“You take money out of the fund that you [had] set up for a rainy day,” he says. “This is a rainy day.”
He definitely benefitted from his “be prepared” attitude. Just as he’d had generators installed in his home and business, each year he sets aside funds sufficient to keep the business running in the off-season.
None of his 27 staff members had to be laid off. Not only that, but the employees could serve their customers in other ways.
“I’d call up [customers] and say, ‘I know the pool is trashed. How can we help you?’” Blanda says. “We ended up helping them with their [government aid] paperwork — for free.”
That doesn’t mean he stopped trying to drum up more business. “We were available to, say, pump out a basement. … We talked to customers about replacing pool equipment as early as we could, but they weren’t very focused; they were still in shock.”
Indeed, Blanda says that was the biggest challenge after the hurricane.
“You’re looking at someone who’s devastated, yet they need your service and you must charge to survive,” he says.
How are things these days? “The volume of pools is strong again. It’s definitely [heading upward]. In the last two to four years, the high-end customers have been more willing to spend money,” Blanda says.
He credits his business’ resilience to planning ahead.
Snowstorm’s devastating damage
It’s not unusual for snow to fall in upstate New York in winter. But what happened in 2014 qualifies as unusual.
For three days in late November, a blizzard dumped 3- to 5 inches of snow per hour, while wind gusts created white-out conditions and drifts up to 6 feet tall. Heavy snow loads caused a number of businesses’ roofs to collapse, including the Hamburg, N.Y. store for Colley’s Pools & Spas.
“The strange thing about this storm is it just hung over our area for three days,” says Joe Pastuszynski, operating manager at Colley’s. “We’re 10 miles out of Buffalo and there was no snow in Buffalo!” Three or four businesses within 3 miles also had roof cave-ins.
Colley’s property houses a store and warehouse. The warehouse was not harmed, but the 10,000-square-foot showroom and partsroom were severely damaged. Some of the dozen spas in the showroom could be recovered. And fortunately, there was no harm to merchandise on the sides of the room.
Other areas were more affected. “It hit the parts room really bad, with water leaking all over, then freezing into icicles,” Pastuszynski says. That didn’t help the room’s contents — pool parts and equipment, inground cleaners, and supplies such as glues, primers and tapes. The cost of the damages still haven’t been determined as the insurance claim continues to be processed.
While Colley’s didn’t have a plan for the disaster, it quickly rose to the challenge. “People at the upper levels of the company talked about how to keep open and sell,” Pastuszynski says. “They were already thinking, ‘How can we be up and running for spring?’”
Colley’s only shut down for about a week while management figured out a strategy. “We were a little in shock after it happened, [but] we didn’t miss a beat,” Pastuszynski says. “We were able to keep a 40-by-40-foot section of the original showroom that wasn’t damaged and … it’s been functioning as a showroom. It was a lifesaver.”
Three construction trailers were brought in, and the staff worked out of those while a replacement warehouse was constructed.
In the devastation, management saw an opportunity to improve the property. The old warehouse is being converted to office and conference space, while a new showroom is being constructed.
The incident also caused staff to assess some of their business methods, such as purchasing and keeping inventory. “... We found we had more inventory than we really needed,” Pastuszynski says. “We were able to take a better look at how we’re buying.”
Another plus: Manufacturers and suppliers held onto Colley’s early-buys until the new warehouse was completed.
Staff discussed how the new facilities could offer improvements over the old. Meetings were held to review blueprints, and suggestions were offered. For instance, there wasn’t much security for the building. “When you think of how much inventory there was … anybody could come in,” Pastuszynski says. “We decided to limit access.”
They also sought a more efficient floor layout than before. The old showroom was three stories tall, put together piecemeal. And more organization was needed. “Sometimes people worked on projects, taking things apart and not putting them back together, so things were scattered around in corners. We need to be more orderly.”
Pastuszynski’s advice for industry colleagues who might be faced with a disaster someday: “Put a contingency plan together, and assemble a list of three or four people to call in a disaster.”
Trouble from within
When it comes to a business owner’s worst fears, a rogue employee ranks right up there toward the top of the list, and for good reason. The American Management Association has been quoted as saying that as much as 20 percent of business failures may result from employee dishonesty, including theft.
So five years ago, when Suntime Pools West experienced a spate of incidents including theft of two computer servers, destruction of five of its 12 vehicles, and credit-card misuse — all by one employee — it was a wake-up call. The Louisville, Ky.-based building/retail/service firm immediately began adding more security to its buildings and procedures.
It cost the company more than $100,000 in damages, what with buying new vehicles, tools and servers. At least there was one silver lining: They had a backup of their customer database, so all that valuable information was not lost.
When a business disruption of this magnitude occurs, action must be swift and decisive. “We got a lot more watchful,” Vice President Sarah Buhl says. The company immediately had security cameras installed on the warehouse’s front and back doors, and on the front doors of its Louisville and Crestwood stores. All locks were changed and windows were outfitted with burglar-resistant glass, sensors and alarms. For the main location in Louisville, the warehouse crew sends a truck out on nightly patrols of the property.
The firm, which has 47 employees in season, also monitors internal procedures more diligently. For example, whereas five or six employees previously would share Buhl’s credit card to get fuel or supplies, now they have their own corporate credit cards. “We watch receipts, make a spreadsheet … and pretty much do a daily audit,” Buhl says. More frequent audits make it easier for an employee to recall details on a transaction when red flags come up because only a day has passed since the purchase, rather than a month.
“We also have more procedures in place for inventory,” she adds. “Now there’s an inventory manager — the guys don’t pull their own stock anymore; they must ask for it.”
The firm also employs more scrutiny during the hiring process. In the past, Buhl says, they didn’t really check references. Since the incidents of 2010, the company not only contacts references but, once the job applicant agrees to a background check, also has a private investigator run a multistate check.
And the firm has outfitted every company vehicle with GPS. “It wasn’t a direct result [of the incidents], but as part of our effort to standardize and be more attentive to procedures and protocols,” Buhl notes.
What was the staff’s reaction to implementation of these new security procedures? “Most were supportive and glad,” Buhl reports. The earlier incidents were disturbing, but she says the staff camaraderie remained intact. “We’re still a pretty close-knit group … and we do fun stuff, too.”
Acknowledging that this sort of thing could happen to any company, Buhl says the advice she would give to industry colleagues is to not be caught blindsided.
“We wish we’d enacted the security earlier. It’s the smart thing to do,” she says.
Many things can be done to safeguard a business before disaster strikes. Here are some key steps:
* Develop a formal written plan: Figure out exactly how your company will respond to a disaster, including where and how to temporarily relocate if necessary. Then document it.
* Train the staff: Explain your disaster recovery plan, assign responsibilities and offer training so they can help when needed. You may want to conduct drills and assess response.
* Store emergency supplies: First aid kits, flashlights and a battery-powered radio are musts. Consider food, water and blankets. Have a backup generator in case of a power outage.
* Keep key info off site: Save your customer database and other critical data remotely, say, in the cloud. Keep an off-site list of banking info, insurance policies and phone numbers of employees, key customers, vendors and suppliers. Have an up-to-date inventory of business equipment, supplies and merchandise. It’s also a good idea to have photos of your inventory.
* Safeguard the property. External and security doors should have deadbolts locks and steel frames. Doors, windows and other entry places should be fortified with bright interior and exterior lights, alarms and motion sensors. Windows with burglar-resistant glass, security cameras and security patrols also should be considered.
* Institute tight accounting controls: Conduct frequent audits and establish a policy for reporting thefts and other crimes by co-workers without fear of exposure or reprisal.
* Scrutinize job candidates: Screen them before hiring.
* Reward positive behavior: Set performance standards, reward loyalty and acknowledge hard work.
Source: Insurance Information Institute