Business Survival: When Nature Strikes

It’s difficult for remodelers to survive a slow market and stiff competition. Then throw Mother Nature in the mix and the difficulty level rises. Difficulty — and flood waters — rose quickly in 2011 when Hurricane Irene hit the Northeast coast of the United States, leaving devastation behind in the offices of remodeling firm Harth Builders in Spring House, Pa.

At the time the storm hit, Harth Builders’ offices were in the lower level of the home of CEO Allyn Harth, CR, CKBR, CAPS. When Harth walked into the office the morning after the storm, he saw desks, papers, computers, uncashed checks, mud, a wheelbarrow from his backyard and three snapping turtles submerged in 4 ft. of water.

Seven people had worked in the space. Phones and power were disconnected, and no one knew what to do next.

 

What now?

As soon as the water was low enough, the Harth team began moving paperwork upstairs and outside to dry. Fans and dehumidifiers sped up the drying process. The crew worked off cell phones and did the best they could to keep business going in the office. The lead carpenter kept projects running in the field without a hitch, Harth says. Soon, office operations moved upstairs to the big room where the company started almost 20 years earlier.

Customers who also experienced Irene’s wrath understood Harth Builders’ challenges and were patient as their projects continued as best they could. All existing business was saved. What troubled Harth, though, was the new business the company was missing because no one could contact them by land-line phone. The best Harth could do was distribute a press release letting the community know the remodeler was still in business, and include cell phone numbers. The team found most important paperwork and was able to enter the data into the new system, but two checks were lost. Luckily, they were replaced.

Looking back at the immediate aftermath of the storm, Harth believed he was out of business. “Who knows how much business we lost because potential clients could not get in touch with us? Those lost leads will never be quantified,” he remembers.

Meanwhile, Harth began looking for new office space. He couldn’t find anything suitable in his price range, until finally the vice president of his bank alerted Harth to a space that might work, right behind the bank building. “It had been sitting empty a year and half, but it had desks, chairs and everything in it. All we had to do was move in,” he recalls.

Harth negotiated a year’s lease with an option to buy. The space was larger than the old space. “It was almost five weeks from flood to move-in,” Harth says. “It took us another two or three weeks to get reorganized. Now, two years in the new space, the Harth Builders team is growing and running out of room. “Good problem, all things considered,” he says.

 

Lessons learned

The most important lesson, Harth says, was about insurance. “We thought we had insurance for a flood; the agency had said yes when we asked, but they never said the word ‘flood,’” he says. Harth was not covered for much of the damage because his insurance covered personal property, not business. The business took a $50,000 hit to replace desks, computers and other office equipment. “Check your insurance policy and make sure it’s up to date. Additionally, make sure you’re covered for what you want to be covered for, and get it in writing,” he says.

Another lesson is to maintain multiple versions of project binders, including client selections, what’s left to be done, what has been done, and any other information pertaining to active projects. “Keep them in separate places, of course,” Harth adds.

It’s important to back up data, too. It’s good to enter data into your system as it arrives, but that’s only half the battle, Harth says. “You must have it backed up. We had backup to the second floor, but there was six weeks of data not logged in, so the backup didn’t do much good,” he explains. Harth Builders’ data system is now backed up by the cloud.

Finally, it’s important to have a disaster plan that covers significant incidents such as key staff leaving the company, deaths, fire, flood, tornadoes, and similar events. “Ours, as you might imagine, is pretty good and based on experience,” he says.

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