The entire Dun & Bradstreet Credibility Corp team would like to offer our condolences to the people affected by Superstorm Sandy.
My office is located in New Jersey so I’ve seen firsthand the disruption that a natural distaster can have on a company, and yet, as a large company with employees distributed all over the country, it’s easier for us to recover than many businesses where the entire workforce is local.
Normally, a highlight of my job as VP of Sales, Operations and Training is that I get to talk with dozens of small business owners each day. During the typical conversation, I’ll provide consultations with business owners so they can understand the steps they can take to build their business credit. However, after a natural disaster like Superstorm Sandy, the conversations often have a more somber tone as business owners struggle to find the financial resources needed to get back on their feet.
There are many useful resources available for small business owners after a natual disaster, but I want to focus this article on the five key things you should do to protect your business credit after a disaster.
1. Notify Your Customers
As the damage of Superstorm Sandy is still being calculated, many business owners are starting to understand better the immediate future of their small business. If you are a supplier to other companies, we strongly suggest contacting those companies and letting them know your deliveries will be stalled due to the hurricane. Don’t allow missed shipments of goods or services to go without explanation. The companies you work with may have compassion during this time, but you need to explain your situation. Proactively reach out to them and give them the current state of affairs. Don’t over-promise, but do set realistic expectations and remind them how much you appreciate their business in the past, the present, and the future.
2. Notify Your Suppliers
Let your suppliers know if you’re experiencing a short-term cash flow problem. Odds are you’re not the only one experiencing this, but you may be the only one notifying your suppliers.
Additionally, ask them to note in their accounts receivable files that this is a one-time event due to a natural disaster, which will help explain the unusual delay. Because you cannot know specifically which of your vendors report trade references to D&B, it’s important that those who do report your payment timeliness know about your special circumstance. While there is no guarantee that this will protect your credit scores from being negatively impacted, there is a better chance that your credit scores will not change.
3. Review Your D&B Business Information
It’s critical for small business owners to log in to iUpdate to review their business information. This is completely free and will allow owners to make sure all the basic information on their company is correct. If you want to take it a step further than consider one of our solutions that can help you build your business credit.
4. Business Credit Isn’t Built in a Day.
Even during a natural distaster when everything seems extra challenging, it’s so important to take the long-term view and understand that building a healthy business credit report takes time.
I purposefully use the word “build” when referring to business credit, as we see it as something that can be actively changed and managed by small business owners. The flip side of that, however, is that because it is built, it doesn’t create itself. Business credit should be considered an integral part of your business processes and you need to be proactive in this area just like you are when it comes to acquiring new customers, managing your cash flow, and promoting your company. Your business credit file plays an important role in all three of these areas.
Now, if you haven’t had a chance to do this yet, don’t despair! It’s like saving for your retirement – it’s never too late to start building business credit. The worst thing you can do is put your head in the sand and ignore it.
5. Tap Into the Many Resources Available to Your Business
For obvious reasons, we know that not every business will be able to get back on their feet quickly (or amazingly continue to operate). We also know that the economic impacts will be long-term and immense. However, again, there’s no use putting your head in the sand. Instead, tap into some of many resources designed to get your business back on it’s feet so you can be more likely to rebound before there’s an affect on your business credit.
Some of the resource we think you’ll find helpful include:
- After the Storm: Disaster Resources to Rebuild Your Small Business — Article detailing programs from the SBA Disaster Assistance Offices, IRS Distaster Assistance, DistasterAssistance.gov and more.
- Settling Insurance Claims After a Disaster
- Hurricane Sandy damage? Here are some tips for post-storm relief — List out tips and recommendations from the BBB.
And while it’s not always possible, sometimes there’s a way for a natural disaster to refocus you on what’s important and create opportunities for your small business.
[photo curtesy of Dasen Pearce]