After the tears when a flood or a fire has wiped out your business, what are the important lessons for dealing with a crisis?
These are good times at Brisbane’s Moo Moo The Wine Bar & Grill. Tables are full, bookings are up and customers appear happy. “The other night I looked around at the full house and said to a staff member, ‘you would never think we had been shut for three months’,” Moo Moo owner Steven Adams says. “All of that seems like such a distant memory now.”
The room Adams now proudly looks out on was underwater in January during the disastrous Brisbane floods. So severe was the damage, Moo Moo had to be fitted out all over again only six months after opening.
Now that life in Brisbane has almost returned to normal, with rebuilding and renovations continuing across the city, lessons are being evaluated from the worst of the crisis and what strategies are needed to put the local economy back on track.
The Australian economy has been dealt a volley of blows this year from Mother Nature, including the Brisbane floods, Cyclone Yasi and Western Australia’s Carnarvon floods. The Black Saturday Bushfires in Victoria in 2009 also shocked the nation with its ferocity.
The Queensland Chamber of Commerce and Industry estimated the Brisbane floods cost an average loss of $834,992 for businesses that had to stop trading due to flooding. The median average loss, however, was closer to $60,000. While Adams calls the disaster, “Something you could never plan for”, he admits the experience has provided him with a range of lessons about how to handle a crisis.
The first lesson is about the timing—as in, there is no time to waste.
“Next time, at the very first sign of trouble—no matter what that trouble is—we would remove everything,” Adams says. “There should be no time for hesitation. If you worry something might happen, then act on it straight away.
“We didn’t have a clue how bad the risk would be. Next time we wouldn’t wait to find out.”
Reacting to the instinct of impending danger is what Jason Coolen of The Gunshop Café in Brisbane’s West End insists saved his business. Within minutes of the flood warnings, Coolen had assembled his staff and a team of tradesmen to cut valuable appliances like stoves and refrigerators out of their fittings, created a bank of tables through the main floor of the restaurant and placed appliances, stock and valuables on top of the tables.
“There should be no time for hesitation. If you worry something might happen, then act on it straight away.” Steven Adams, Moo Moo The Wine Bar & Grill, Brisbane
“I heard the predictions of how high they were expecting the waters to go, and so we worked out the tables were above that and put everything up that high and hoped for the best,” Coolen tells. “It saved the place and saved thousands.
“We also had trucks on standby if things got worse, and also had pumps running. I think we did everything right, and I would not have done anything differently. We were open eight days later, and most of that delay was due to the electricity being out,” he says.
Aside from the physical practicalities of rescuing equipment and clearing the mess, a crisis like a flood or a fire also demands a range of action once the immediate danger has passed. After taking stock of the extent of damage, strategies must be determined to create pathways leading to the reopening of the front doors. Essential issues include how staff is managed when the business is not in operation, and whether reductions need to be made. Suppliers have to be kept in contact with about the state of future orders, as do financial institutions about regular payments like mortgage and salaries. There are the negotiations of tackling insurance companies for compensation, as well as with landlords for picking apart all the terms of a lease.
Sadly, it is often only in the wake of a crisis that many owners take the time to read all the fine print on their insurance policies and lease agreements. Lawyer Con Castrisos, who suffered the ruin of his own business, Southbank’s Cafe San Marco, says new scrutiny of all documents is a must.
“A lot of restaurant owners didn’t have flood insurance,” Castrisos explains. “Then there are other insurances including destruction by an event, so I suppose owners didn’t think about the differences when they were completing their initial applications. But you need to know exactly what you are being covered for.
“You also need to read the lease documents closely, as there are certain obligations that may include a base level of rent while (repairs) occur. You need to make sure that should a catastrophic event occur and you need to renovate, that you’ve actually got something to lease.
“There will be a lot more scrutiny in future about where businesses go based on historical data. There needs to be careful review of leases to check whether the area was flood affected or threatened by bushfire in the past.”
But how the restaurant is actually fitted out can also make a significant difference, adds Jason Coolen. He says he will now ensure his cafe has an emergency generator to guarantee power in any circumstances. He also advocates the placement of the electrical mains can mean the difference between survival and disaster. “I know of a lot of places that went out of action, even though their main floors were not flooded, but they had basements that were, and that was where their electrical circuit boards were,” Coolen says.
“Many restaurants must now look at where those electrical boxes are placed. I would never invest in a place that had everything in the basement. The fact our box is half way up our main room wall proved to be a saver for us.”
Instigating regular communication strategies with both staff and customers, Steven Adams says, proved to be one of the best steps he adopted for Moo Moo’s recovery.
While Moo Moo lost 25 per cent of its original team through the recovery time, Adams says a tremendous amount of energy was devoted to holding on to the remaining 75 per cent.
“You have to do everything to keep them motivated, keep them informed and keep them with their eye on the goal,” he says. “I spent months putting together the best team, and to let them go would have been catastrophic. We did everything we could to hold on to them, including placing some temporarily in other restaurants that were open.
“It is the same with customers. If you want to re-open your doors to full houses, you need to keep the marketing going and customers informed on what is happening. In that way, they are involved in the recovery as well. You must also maintain your brand.”
Allana Ryan from Fish Lovers in the inner Brisbane suburb of Rosalie says that after being closed for two months, it was taking part in a community event that signaled the return of strong business.
“All the businesses where we are reopened at the same time, so we had a big street party to let everyone know we were back in business,” she says. “You must let people know you are alive and running—that is one thing not to keep a secret.”
And in contrast to what Fish Lovers has just endured with floodwaters, Ryan has now implemented new measures regarding fire safety.
“All the new fire extinguishers are now in place and the staff have had training,” she says. “The flood was awful, but it taught us that anything can happen. Fire really scares me, so I now know that problem has been planned for and taken care of.”