First, I want to briefly note what a terrible situation a location fire or any catastrophic event can be for an operator. As prepared as you think you might be, you are never prepared for the fallout and the lessons you will learn through the process of rebuilding.
If you decide to rebuild, there are some very difficult issues that need to be dealt with. Hopefully through our tragedy, I will be able to insulate you against some of the pains we at La Nova went through this fall with our situation. I personally hope no one has to go through this, but as we know, situations like this do occur. Here are what I hope to be some pitfalls to avoid and some direction to take if this circumstance befalls your business.
Prepare for the worst
It is so easy to be caught up in the daily operations and all of the issues we deal with as pizza makers and totally overlook potential disaster. As many times as we have heard others having like circumstances, we never thought it would happen to us. When it did, our insurance relationship came under a microscope and luckily we had some foresight. You need to be prepared with both traditional insurance and lost business insurance. One will help in the process of rebuilding the location; the other will, hopefully, allow you to maintain some of the vendor and employee relationships you have developed throughout your business tenure. Understand though that this is NEVER enough. Without constant revenues and with the delays in benefits and relief from carriers, the flow of money in and the banking relationship you have is going to be under stress.
When times are good, you need to SAVE. That means you need to have not burned through all of the profits when things are going well and market conditions are beneficial. Without those savings, most operators have to go through bankruptcy if a fire, flood, or any other catastrophic event makes them cease doing business for any amount of time.
It will be difficult, if not impossible to go through a rebuilding process without some personal savings to be leveraged or used during the situation. Week to week operators should proceed with great caution. Small amounts of sacrifice now will save you a lifetime of pain later.
Keep Key Employees In the Process
One of the hard lessons we learned was that people are not going to be able to sit around and wait for you to reopen. Your best employees will have no problem finding work, and your marginal employees will sit back and wait for you to come back. Not a good equation for the future. What we did, and it was a luxury to have it, was to have management and key employees get time in at our other location. We also had many of our own employees work with us in the tear down and build process. If there was a way to keep a key employee on the payroll, we found it. Sadly, there is going to be some loss there. We also were very aggressive in trying to find new staff almost four weeks before our scheduled reopening. It allowed us to be well ahead of the game when it came time to reopen. It also allowed for us to trim some of the weaker staff we had prior to the fire.
Understand and Be Involved in the Process
As store owners, many of us have been in building, remodel and repair situations. The most important lesson that we knew was if you are not there, things won't get done. We had a member of ownership or management at the location, involved in the process, and monitoring the contractors every single day! If you are not there, you might as well kiss money goodbye. Timeframes are already going to be delayed, goals will be pushed back, and costs will increase without question regardless of the time spent and level of involvement. If you allow the process to go unchecked, these situations will multiply fast. Just like if you are in your stores when they are in operation, your stores run well, the same rings true for the rebuild; at least as well as possible.
Be Prepared for the Opening:
Estimate your reopening timeframe and then add three to four weeks as a realistic point. Unfortunately, there will be costs, outside factors and issues that will inevitably set the opening back. Hopefully, you have a system that keeps records of your customers. If you do, you need to stimulate those customers to come back. Make them feel part of the celebration of reopening. Remember, there is great competition out there. Every time a customer tried to order from you and you weren't open, they tried another pizzeria's goods. Sometimes you might lose them, especially if they don't know when you are back in business. Phone and mailing notices are the best avenues to let them know how much you value their business.
There is no good way to prevent the situation, but there are ways to be prepared. Again, make sure your insurance package prepares you for a loss of business. Be frugal during great times and good profits. Create environments that make your good people want to stay or return in a gap situation. Manage your banking relationships professionally.
Communicate at all levels and be involved in the process. Let your customers know what is going on as far as your brand is concerned.
These tips are a lot of the same things that you should be doing to separate yourself from the competition. Hopefully, you'll never have to be put in the position La Nova was and have to use these systems.
A note of thanks to PMQ and all of the other supporters of La Nova that helped us during our time of need.