Business Miscellaneous

How to Keep Your Business Running After an Unexpected Crisis

Many small business owners spend their time and energy tackling the day-to-day challenges and opportunities that keep their business running. Immediate needs like selling a product, providing a service, keeping customers and employees happy, or managing payroll and expenses are top of mind. This leaves little headspace to worry about what might happen down the road. Unforeseen crises like flooding or broken equipment can leave small businesses scrambling to stay afloat, cover unexpected costs and maintain steady cash flow. In fact, small business owners report spending an average of 28% of their cash flow on unexpected expenses.  

Dr. Dickson Chen, an optometrist in Los Angeles, had been running Davich Optical with his wife for fewer than two years when a fire at the supermarket next door damaged his office. Until then, Dickson was focused on seeing his patients, maintaining payroll for seven employees and paying rent. All of that changed when smoke and water damage from the fire forced him to close the office for three days, leaving him with a cash flow deficit and expensive construction needs.

Fortunately, he was able to reopen quickly and recover from the crisis. Here’s his advice on how to weather the storm and what other small businesses can do in similar circumstances.

Assess the full damage by looking for hidden business impact

A fire obviously leads to physical damage that must be fixed for the business to recover, but Dr. Chen had an unforeseen and less obvious business impact to consider. On top of the remodeling costs, he also discovered the hidden impact of the supermarket being shut down — the popular store brought a lot of foot traffic to the area, which helped bring in new patients. The supermarket would take at least a year to remodel, and Dickson had to account for the impact that decreased foot traffic would have on his customer growth. In order to make up for this, he increased marketing efforts in local newspapers and radio ads and even made promotional pens to give away. “Do all the marketing you can afford is my best advice,” he says.

Online lending helped  maintain cash flow and rebuild quickly

Assessing the full impact of the fire took at least a month, including numerous meetings and phone calls with adjustors and contractors. Once Dickson understood the extent of the damage, he needed to remodel quickly. The cost of construction would be due upfront, and insurance reimbursements could take several months. Meanwhile, rent and payroll still needed to be paid on time. He turned to Kabbage to secure a line of credit that helped him pay for construction — including a remodel of the office’s lab area, new floors and walls, plumbing and electrical — without waiting for insurance. Kabbage provided the cash flow he needed right away. A construction process that could have taken months to start was expedited with a Kabbage loan that helped Davich Optical quickly recover from the damage.

Get creative to reopen as soon as possible

Davich Optical is open seven days a week with no appointment necessary to help service the busy residents of Los Angeles. Shutting down for even a few days to remodel was a big hit to the business — Dickson calculated the loss to be about $5K per day. Dickson knew he needed to get creative in order to reopen as soon as possible. He limited construction to certain portions of the office at a time and curtained off those spaces, leaving the rest of the office open, undisturbed and available to see patients. This allowed him to keep seeing patients while he worked to reopen as soon as possible and lessen the loss of patients and revenue.

A year after the fire, Davich Optical has recovered and is back to growing its patient base. Dickson aims to continue growing the practice and is considering another Kabbage loan to expand his marketing efforts.

About the author


Aditya Narula