Whether we are talking about natural disasters, politics and economics, or new technologies that render current business models obsolete, there are a nearly endless number of factors outside of our control that can wreak havoc on companies of all shapes and sizes at a moments notice.
It is always going to be easier to stick our heads in the sand and hope for the best, but those are the people who end up losing the most when trouble shows up. So, no matter what type of industry your business operates in, consider what it might have been like to be impacted by any of the following six disasters.
It seems like the devastation caused by wildfires is getting worse and worse just about every year in California, and many experts believe that trend will continue to get even worse in the years to come.
Not only do these fires cause a threat to local businesses, but they can also destroy an entire customer base as they move through neighborhood after neighborhood in the blink of an eye.
And when those fires are followed by periods of excessive rains, even more damage can be done as a result, which can make staying alive virtually impossible for most businesses.
Back when Hurricane Andrew hit the coast of Florida, it seemed like those types of cataclysmic disasters were few and far between. But since we watched Hurricane Katrina destroy New Orleans, it seems like we have dealt with a major storm every single year.
In recent years, Hurricane Sandy and Hurricane Harvey have struck in areas that weren’t expecting storms of their caliber, and the devastation was astounding.
If your business operated in one of the areas impacted by these storms, you already know how hard it was to struggle through those times, and there is always the chance that another storm could create the same type of chaos.
Real Estate Collapse
Another disaster that is fresh in everyone’s mind is the real estate collapse that we witnessed in 2008. During that time, the country watched as home values plummeted and consumers who were in the process of losing their homes had zero disposable income to patronize local businesses.
In addition to local businesses suffering, that was also a trying time for everyone in the financial industry, as the increased amount of red tape during the recovery made transactions requiring any type of financing nearly impossible.
The Great Depression
While the real estate collapse of 2008 was tragic for a plethora of businesses, it can’t touch the damage that was done to all of the companies that were thriving throughout the roaring 1920s when the Great Depression took hold of the economy.
At that time, it seemed like just about everyone was out of work, and affording even basic necessities like bread was difficult for many Americans.
Should we experience a stock market crash like the one that started the Great Depression in 1929, there is no reason that we couldn’t find ourselves right back in that same place in the future.
While a disaster on the level of the Great Depression is still an improbable event, a catastrophe like the government shutdown through the first two months of 2019 is entirely possible, if not probable.
During the shutdown in 2019, all government workers were either forbidden to come to work or required to work without pay. Missing over a month’s worth of paychecks was extremely difficult for many government employees, just as it would be for any average consumer in the United States.
If something like that were to happen again, or for any prolonged amount of time, how would a sudden reduction in consumer spending power impact your business?
Everyone thinks that the people who made buggy whips should have seen the evolution of cars coming. And in hindsight, it was probably pretty obvious that streaming services like Netflix were going to put brick and mortar video rental companies like Blockbuster out of business.
But despite their best efforts, neither the buggy whip makers or the people at Blockbuster were able to prevent the inevitable.
No matter what industry your company happens to find itself in, there could be a new form of technology coming that will eventually make your entire business model obsolete.
Should that happen, how prepared are you to take on that fight?
Have a Plan in Place
Whether we are talking about natural disasters, politics and economics, or new technologies, there are always going to be more potential disasters that can ruin your business than you could ever prepare for.
However, one proven fact that has stood the test of time is that businesses built on solid financial foundations are better able to survive disaster situations than companies that are over-leveraged and undercapitalized.
That is why one of the best things you can do to prepare for any type of disaster is to have a firm grasp on your accounts receivable and a set plan in place to handle debt collections for any accounts that fall into delinquent status.
By partnering with a quality commercial debt collection agency like Direct Recovery today, you are already making an effort to prepare for the disasters of tomorrow. And when the inevitable disaster strikes, you will be able to take on those new challenges from a position of strength.