How to rebuild from unprecedented loss

Here are a few tips if you have suffered devastating financial and tangible losses.

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By Hitesh Dullabh

The loss and physical destruction witnessed over the last week in the devastating flooding in KwaZulu-Natal have been surprising, to say the least.


In such instances, safety and survival for oneself, family, and community are of utmost priority. Despite the pain and inconvenience caused by these events, our natural resolve and historical resilience as South Africans will lead us through this disaster.


For business owners, especially small and family-owned businesses, it will be tough to bounce back particularly considering the sheer impact of loss suffered. In times like this, there are businesses that may have lost most (if not all) of their asset base in their enterprise. Many face not only the loss of inventory, but also damaged furniture and fixtures, equipment, and property. Some may feel that the losses are just too insurmountable.


While it pains to say, there are going to be some businesses that may not be able to come back from such an event. The simple truth is that when businesses close their doors, a butterfly effect occurs for many social and economic players.


The loss of jobs and the increased unemployment rate is just one of them. But with the right plan and collective effort, we may be able to make sure that we keep as many businesses running as possible.


As a business owner, if you have suffered devastating financial and tangible losses, and are wondering what can you do to ensure you save your business? Here are a couple of our considerations:


Take inventory of what’s left

You cannot start rebuilding without knowing what you still have and what you have lost. Make a list of what’s left and include things that can be restored/repaired.


Contact your insurance broker

For those who were able to afford insurance, do speak to your broker or insurance representative. Obtain clear guidance on what you are covered for, if you are covered for such events, the value of cover, and how to go about the process of putting through a claim. Make sure you are clear and aware of the timelines for processing a claim and the pay-out (if any). This will help you in your budgeting process.


Liability management

This includes the people/businesses that you owe money to or have to make payments to as part of your business. Communication is key – to give your business the best chance of bouncing back you will need these stakeholders on your side. Chat to your creditors, bankers, or finance providers about the following relief mechanisms, moratoriums (payment holidays), extended credit terms and waiving interest for a certain period. You may find a lot of them are empathetic to the situation you face and such mechanisms will allow you to buy some time to at least get things up and running again.


Accounts receivable

Speak to customers that still owe you money. There may be some blue-chip (large corporates/ business) clients that are hopefully not impacted by such a devastating event. Chat to them about possibly settling some or all of their account balances earlier than your usual credit terms in order to help recoup cash to your business. Offer early settlement discounts if you are able to. A bird in the hand is greater than two in the bush.


Speak to your employees

Businesses are people-run enterprises and employees are integral to the rebuilding process. A larger collective purpose resonates more with people as opposed to being treated as a means to an end.


Perform a detailed budget exercise

Go through a detailed and granular budget exercise on what you as the entrepreneur need in order to get back to operational capacity. Consider whether you have the collective funds (personal, business, or anticipated insurance proceeds) to keep the business afloat until you are able to break even again. Remember that operations don’t need to be 100% back to the level you were, but should be at a level that at least allows you to open the doors and service customers. Building your capacity back to 100% will take time.


This is definitely not an exhaustive or comprehensive list to help your business back on its feet, but it can be a good start. Get advice and involve people such as your trusted business advisors, business bankers, consultants, and accountants in the process. You might just get tips that you haven’t even thought of.

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About the Author

Hitesh Dullabh is the director of Evimeria Consulting. He is a qualified Chartered Accountant of South Africa and is in the process of completing his Masters in Commerce (Corporate Finance and Valuations) at the University of Cape Town.

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