Date: August 31, 2021
Is your business prepared for the costs of a natural disaster?
I’m sure you’ve heard by now that the Gulf Coast has been ravaged by Hurricane Ida, whether you were (or are) in the path of the storm or not, the chances your business will feel the financial impacts of Ida are very high. When a natural disaster strikes, the financial impacts can be felt virtually everywhere. Many small business owners aren’t aware of the ripple effect until it is too late and they must succumb to price hikes that typically follow a natural disaster like Ida.
It could be quite sometime before the full extent of the damage is known, with access severely limited due to flooding and downed trees. About 95% of oil production and 94% of gas output has been shut-in as of Monday, according to the Bureau of Safety and Environmental Enforcement. This means you can bet on an increase in gas and energy costs, across the nation. The shut-down of the oil and gas production sites in itself won’t cause too high of an increase in gas and electricity prices, it’s the panic that sets in after a natural disaster that causes the most economic damage. When the nation discovers that production has been limited, the resource becomes more scarce. When a resource is scarce, prices go up (this is known as the Law of Supply and Demand) and it’s how our capitalist markets keep a balance.
When taxpayers rush to fill their tanks before the gas runs out or the prices climb too high, many will hoard fuel as a precautionary measure (deja vu with the toilet paper shortages in America amidst the pandemic break out). This hoarding by a few causes price increases across the board, and across the nation. So, how do you protect your business? If your industry is one that requires substantial travel, the increase in fuel costs could be detrimental to your bottom line. Even if your industry doesn’t require substantial travel, the financial impacts will still be felt as the government provides economic assistance, unemployment rates climb, and small businesses that don’t have adequate asset protection go bankrupt.
The key to any disaster is prevention.
Is your business prepared to withstand higher market prices for things like fuel, electricity, and labor? Do you have an asset protection strategy in place to mitigate financial risks like the ones that Hurricane Ida brings? If you don’t have an emergency plan in place, the impacts are heavier and harder to deal with. If you answered no to any of the questions above, we’d be happy to help. We can help you analyze your business for current risk, understand key areas of the business that need a protection strategy in place, and help you create and implement a plan to protect your assets, profits, and team (no matter what happens). Click here to book a complimentary strategy session with one of our experts.