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Friday, March 24, 2017

How Flooding Affects Businesses

By the RestorationSOS Educational Staff

When flooding disasters occur, it is not at all uncommon for thousands of residents to be displaced for an extended period. Likewise, many businesses in the path of these storms may be shuttered for days, weeks, or even months. The ripple effects from shutdowns due to floods may be felt for a long time to come and, in some cases, may be impossible to recover from.

The loss incurred depends on the type of business involved. Floods in recent years in Alabama destroyed cattle, chickens, and horses, almost instantly resulting in more than a month of work lost until the livestock could be replaced. Car dealerships hit by floods may see a large percentage of their inventory damaged, leaving them in unsellable condition and, in all likelihood, having to be scrapped as salvage titles. And businesses that are transportation-based may see operations grind to a halt if their trucks or other transport vehicles are unable to cross flooded areas in order to reach their destination.

More common effects include the damage to the structure as a result of the flood as well as loss of inventory, valuable documents, data stored on water damaged computer drives, damage to valuable machinery or company vehicles that may cost in the hundreds of thousands of dollars to replace.

Other Ways Flooding Affects Business

In some cases, it isn't the actual flood that causes damage, as businesses located out of the water's path may still experience power surges as a result of activity going on in the actual flood zone. These power surges may cause damage to a business' electrical systems or fry their computers as a result, and all without ever being exposed to a drop of water.

While not all businesses will have to shut their doors while repairs are taking place, the vast majority of them will, which means that there may be several days of lost revenue until the point where the company is able to reopen. And even then, there may be an additional period where production has to ramp back up to normal output, resulting in more lost business. Add to that the recovery from inventory that was lost in the flood and you have a financial situation that may take months or even years to recover from.

Of course, businesses also face the effect stemming from the flood’s impact on their workers. Employees will have to see to the safety and security of their family members and their property and, in extreme cases, may be away from work for several days due to forced evacuation. Businesses that are able to operate at all may find themselves working with a skeleton crew for an extended period. The loss of manpower invariably translates into reduced efficiency and loss of production quotas.

Recommended Reading
Preparing for a Flood
Important Concepts in the Management of Floods

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