Last time, I wrote about the importance of understanding your portfolio’s exposure. Let’s get a little more specific and evaluate things from a disaster perspective. FEMA reported that there were 81 declared disasters in the U.S. last year. This year, we’ve already experienced 50 disasters. According to the American Red Cross, “as many as 40% of small businesses do not reopen after a major disaster.”
Since many businesses don’t have disaster recovery plans, you could be directly impacted if a power outage, flood or hurricane should strike the accounts in your portfolio. So perhaps, it may be a good idea to review these questions when evaluating your portfolio:
- Which states are most of your accounts located?
- Are any of these states high risk disaster areas?
- For those accounts that have a potential risk of disaster, what is the amount of exposure you have with these companies?
- If a disaster should strike, would your company be able to recover?
Although you can’t prevent disasters from happening, you can come up with a plan to try to protect your business. Look for future posts from me, and let me know if there are any specific topics about managing your portfolio that you’d like to see.