Scouting for Survival

Ageism is currently in the news and I heard one definition of an older person as “someone who telephones to check that their email has arrived”. I thought it a touch harsh, not only because I myself have, on occasions, done just that but also because I don’t think one should criticize or ridicule someone for wanting reassurance. Younger people may have the confidence and resilience to sort out problems as they arise, but older people are more comfortable anticipating their bridges before they have to cross them, so that they can prepare at their own pace rather than be rushed by some emergency.
As a surveyor, I am sometimes involved in sorting out the ‘bricks & mortar’ aspects of some unexpected disaster. I am always conscious of the need for urgency and whilst one moves heaven and earth to patch up the premises so that trade can continue, it is a sad fact that over 40% of those businesses fail within 6 months of an interruption.
The personal tragedy for homeowners, of losing irreplaceable possessions and possibly being homeless for several months, is bad enough but failure on the part of a business to plan for disaster can result in unemployment for many. I am amazed how little thought is often given to commercial survival and contingency planning. I am prompted to write about this now in the hope that someone, on holiday and away from the day-to-day pressures of running their business, can use just a few quiet moments to do a bit of contingency planning.
After all, there have been quite a few wake-up calls here in the south east. Without straining one’s memory: the Ringmer fireworks factory fire; the partial demolition of an Alfriston pub by a runaway vehicle; the collapse of buildings in Brighton and Eastbourne; the structural damage caused by the criminal removal of several cash machines from shops around Kent; and local flooding caused by burst water mains are but a few examples to add to those catastrophic floods in Lewes, Uckfield and Robertsbridge a few years ago.
Most leases of business premises contain clauses allowing for rent to be suspended if the premises are damaged by fire. What tenants often overlook is that the lease is not cancelled and when the premises are again fit for occupation, they may be liable for continuing rent even if they have moved to another property. Similarly, the relief from rent in respect of fire may not extend to other events such as flood, terrorist attack, vehicle impact etc.
Faced with some disaster, the question of whether rent is still payable and whether the lease is still binding tends to be relatively insignificant compared with the other costs that all too many businesses seem to overlook. Obviously the risks vary with the type of trade, but whether it be a shop, office, factory or pub, ‘loss of profit’ cover is fundamental along with cover for equipment and stock. Then there is cover for penalties under contractual obligations, debts that would have been paid out of turnover, continued wages liability, relocation costs and redundancy payments. Whilst some small and medium size businesses may have cover for stock and equipment, only a minority have insurance for the other equally important potential losses and consequential costs.
The trick is to take time out whilst all is well to analyse a ‘worst-case’ scenario and then plan for evasive action, including off-site duplicate data storage, a cascade phone plan to keep customers and suppliers informed, pre-planned re-routing of phone and fax, as well as safeguarding shareholders and employees interests by judicious insurance cover. In other words ‘be prepared’, even if you never were a scout.
©July 2010

NOTE:
The writer is an independent chartered surveyor and has no connection with any firm of estate agents or surveyors. For reasons of client confidentiality he writes under a pseudonym. Comments and enquiries are welcome and may be sent c/o Wealden Advertiser Property, Gardens & Interiors.

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