DAILY REPORT EXTRA / Monday, August 22, 2016


    Preserving your brand after a disaster is critical

    One of the smart things the famed Big Easy restaurant Galatoire’s did in the aftermath of Hurricane Katrina, Zehnder Communications Public Relations Director Ann Edelman recalls, was to reopen only once it was able to offer patrons the exact same schedule it kept before the disaster.

    It was different from what other restaurants were doing: Reduced schedules. Serving lunch three days a week. Closed on certain nights for dinner.

    “It was very confusing for people who were already dealing with a lot of information,” she says. “You want to be mindful that people need a routine; they need a safe haven. Especially if it’s a B-to-C business.”

    As companies throughout the Capital Region engage in recovery operations, preserving and serving customers and clients should be high on the list of priorities, branding consultants advise.

    iStock_76369201_SMALLBill Joubert, director of the Louisiana Small Business Development Center in Hammond, suggests one of the first initiatives for any company at this point, whether they sustained damage or not, should be a customer call plan. Let them know if you’re open. If you’re down, provide an estimated timeline for reopening. And if you’re operating from an alternate location, let them know that, too.

    “Print a list of customers by highest level of sales, and contact each and every one of them,” he says. “If you are down, let them know, but if you happen to be up at this point, your customers may have special needs that you can help with. You want to get to them before they make the decision to go find another vendor. Once you’ve done that, you’ve now protected your revenue stream, and that’s absolutely key.”

    Think about what your customers need and communicate that, Edelman advises. If you are facing a rebuilding period, work to engage them over that entire period of time with updates. “Let them know that the commitment and the intention is there,” she says.

    Companies should next turn their attention to the supply chain side, Joubert says. “Depending on the type of business, suppliers may be bombarded with a lot of other people needing what they’re selling,” he notes. “Let them know you’re there. If they don’t know you’re open, they may sell their product to someone else. If you’re in construction, for example, the lumber yard needs to know.”

    Ines Pearce, manager of the U.S. Chamber of Commerce Foundation’s Disaster Help Desk for Business, says it’s critical for businesses to get out ahead with their own information—before the rumors take over.

    “If customers, suppliers and vendors don’t hear from you, they may assume the worst,” she says. “We all know that once a rumor is repeated, it becomes fact, and now you have a bigger problem you’re trying to rectify. It can severely impact a business’ brand. The problem with not being out front with your own information is that customers go somewhere else, and you can potentially lose them forever. It can be extremely difficult to get them back once they have gone elsewhere.”

    iStock_86263221_SMALLEdelman says having someone monitoring all channels for whatever rumors may be out there—whether it be about your company directly, or just the condition of your vicinity—can be an invaluable strategy. “It’s really important to be proactive—and to make sure that in the midst of everything else you’re trying to rebuild, that you’re protecting your reputation on that level and knowing when to react, and what the message needs to be,” she says. “It may also be an indication that you need to step up whatever else you’re doing.”

    That communication can take on a variety of different forms: Signs. Banners. Social media. Email marketing. The local chamber of commerce newsletter. Newspapers and business publications.

    “You can get engaged on a very grassroots level,” Edelman says. “But social media is really the way to go, as well as email marketing.” But media messages must be carefully managed. Posts or emails pre-scheduled prior to the disaster that aren’t appropriate during a crisis should be stopped to avoid, say, people with water creeping in their homes during an unprecedented rain storm getting an email encouraging them to come play golf at the local course the next day.

    “Unfortunately, we saw a lot of this during and after the storm. When something like that happens, you’ve just dinged your brand equity,” she says. “So much of your brand is that you are part of this community. Even if you were victimized, you want to show the empathy and also as the positive statement, ‘We’re going to rebuild together.'”

    When you do reopen and are fully operational, Edelman advises, it’s not the time to say, “OK. It’s over.”

    “Engage with your customers during this entire period of rebuilding,” she says. “Especially during the holidays. You have to connect on a very emotional level because it’s a very emotional time.”

    —Penny Font

    Landlords have obligations after the flood

    The recent floods have ravaged property, devastated lives, and impacted businesses. Much of the legal discussion surrounding the flooding in Louisiana will inevitably involve the ins and outs of flood insurance and FEMA assistance. But Elisabeth Prescott, an attorney for Kean Miller law firm, notes there are other legal implications of the disaster that require consideration, such as the rights and obligations of landlords and tenants in light of the damage and devastation.

    Lease Agreement

    Whether a landlord or tenant, Prescott advises, critical at this stage of the game is your knowing what Louisiana law provides by default, what your lease contract provides and where your lease is silent. The following are key points to keep in mind:

    —Under default Louisiana law, a Louisiana landlord has the obligation to maintain the leased premise in a suitable condition for the purpose for which it was leased [La. Civil Code art. 2682].  Landlords must maintain the property by making all necessary repairs, and tenants must allow the landlord to make all necessary repairs that cannot be postponed until the end of the lease [La. Civil Code arts. 2691 and 2693].

    —Where damage to the leased premises is so significant that the premises are considered totally destroyed, as is likely the case in many of the present instances, default law provides that the lease terminates by operation of law (i.e., without the need for judicial intervention), with neither party owing damages to the other [La. Civil Code art. 2714; see also Comment (d) to article 2714].  If the leased premises are only partially destroyed, the tenant may be entitled to diminution of rent until such time as the landlord can complete the necessary repairs or dissolution of lease, whichever is more appropriate under the circumstances” [La. Civil Code art. 2715].

    —Landlords and tenants must bear in mind that the foregoing are default provisions. Parties to a lease are free to negotiate the specific terms of their lease contracts, and it is important to note that many leases contain specific provisions relating to the rights and obligations of the parties in the context of partial or complete destruction of and repairs to the leased premises. Louisiana case law has addressed article 2714’s provision that a lease terminates by operation of law in light of complete destruction of the leased premises and found that parties to a lease remain free to contract around the default law and, in so doing, prevent such automatic termination [Comment (e) to La. Civil Code art. 2714 citingCerniglia v. Napoli, 517 So.2d 1209 (La.App. 4 Cir. 1987].

    Prescott suggests that during the cleanup process, both tenants and landlords should keep in mind the following:

    —Read your lease and know your rights and obligations.

    —In the aftermath of destruction to the leased premises, the landlord and tenant should communicate early, openly and clearly about the lease provisions and the parties’ respective intentions.

    —The landlord and tenant should discuss the condition of the property and, if possible and so long as the premises are structurally and environmentally sound, the landlord should attempt to provide tenant access to the leased premises to assess damage to and salvage the tenant’s movables. Where such is not possible, it is wise for the landlord to document his attempts to communicate with the tenant and to endeavor as best possible to document damage to the tenant’s movables so as to assist with tenant’s preservation of any insurance claims.

    —It may go without saying, but tenants should ensure their landlord is aware of the damage to the leased premises and, as best possible, the landlord should attempt to account for the post-evacuation location of its tenant to ensure proper lines of communication regarding the lease and leased premises remain open.

    —Landlords who did not have flood insurance or who may be underinsured should consider whether they may qualify for a Small Business Association loan for property or economic loss.

    DailyReport 600x300 GerryLane SPECIAL

    IRS offers resources for reconstructing lost financial records, documenting claims

    Reconstructing records after a disaster may be essential for tax purposes, securing federal assistance or insurance reimbursement. Records needed to prove loss may have been damaged or destroyed in a casualty. While it may not be easy, restoring financial data as quickly as possible may be essential for proving loss for tax purposes.

    The IRS has disaster loss workbooks for individuals and businesses to help compile a room-by-room list of belongings or business equipment. This will help you recall and prove the market value of items for insurance and casualty loss claims.

    Some potential sources of information to reconstruct financial data:

    Wet business contentsInventories: Get copies of invoices from suppliers. Whenever possible, the invoices should date back at least one calendar year.

    Income: Get copies of bank statements. The deposits should closely reflect what the sales were for any given time period. Obtain copies of last year’s federal, state and local tax returns including sales tax reports, payroll tax returns and business licenses (from city or county). These will reflect gross sales for a given time period.

    Real property: Contact the title company, escrow company or bank that handled the purchase to obtain copies of escrow papers. Your real estate broker may also be able to help. Check with your mortgage company for copies of any appraisals or other information they may have about cost or fair market value. Also check with appraisal companies to locate a library of old multiple listing books. These can be used for “comps” to establish a basis or fair market value. Most insurance policies also list the value of the building to establish a base figure for replacement value insurance.

    Furniture and fixtures: Sketch an outline of the inside and outside of the business location. Then start to fill in the details of the sketches. Document what equipment was where, and, if you are a retail establishment, where the products/inventory were located. Outside the building, document shrubs, parking, signs, awnings, etc. If you purchased an existing business, go back to the broker for a copy of the purchase agreement. This should detail what was acquired. If the building was constructed for you, contact the contractor for building plans or the county/city planning commissions for copies of any plans.

    General financial information: The IRS can provide valuable financial data. Immediately after a casualty, you can request a copy of a return and all attachments (including Form W-2) by using Form 4506, Request for Copy of Tax Return (PDF). If you just need information from your return, you can order a transcript by calling (800) 829-1040 or using Form 4506-T, Request for Transcript of Tax Return (PDF). There is no fee for a transcript. Transcripts are available for the current year and returns processed in the three prior years.

    Get more tips from the IRS on reconstructing your financial records.

    The latest resources for businesses

    Six Business Recovery Centers are now open in south Louisiana to assist those impacted by the flooding. No appointment is necessary. All services are provided free of charge.

    SBA representatives will meet with each business owner to explain how an SBA Disaster Loan can help finance their recovery. LSBDC consultants at the center will provide counseling on a wide variety of matters designed to help small business owners re-establish their operations, overcome the effects of the disaster and plan for their future. Services include assessing business economic injury, evaluating the business’s strength, cash flow projections and most importantly, a review of all options to ensure each business makes decisions that are appropriate for its situation.

    —Baton Rouge: Louisiana State Archives, 3851 Essen Lane (near Interstate 12), Mondays through Saturdays from 8 a.m. to 4 p.m.

    Walker: Southeastern Louisiana University Literacy and Technology Center, Room 101, 9261 Florida Blvd., weekdays from 8 a.m. to 4:30 p.m.

    —Lafayette: Louisiana Immersive Technologies Enterprise (LITE) Executive Conference Room, 537 Cajundome Blvd., Mondays through Saturdays from 9 a.m. to 6 p.m., Sundays from noon to 4 p.m.

    —Baker: Baker Workforce Development Center, 3262 Baker Blvd., Mondays through Saturdays from 8 a.m. to 4:30 p.m., Sundays from noon to 4 p.m.

    —Prairieville: BancorpSouth Bank, 13423 Louisiana 73, Mondays through Fridays from 9 a.m. to 4:30 p.m.

    —Amite: Amite Chamber of Commerce, 101 SE Central Ave., Mondays through Saturdays from 9 a.m. to 6 p.m., Sundays from noon to 4 p.m.

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    The Baton Rouge Area Chamber has a Disaster Response guide on its website with multiple resources for companies in recovery mode. Louisiana Economic Development also has a Flood Recovery Assistance section on its website with resources for impacted businesses. The Louisiana Business Emergency Operations Center provides disaster-specific communications from the Governor’s Office of Homeland Security & Emergency Preparedness to industry associations and almost 2,200 registered member organizations to coordinate private-sector businesses and nonprofit organizations.

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    The U.S. Chamber of Commerce Foundation Disaster Help Desk is available 24/7 to help businesses mitigate disaster interruption and, after disasters, to enhance community economic recovery. It’s available free of charge to any caller to answer questions. Reach the Help Desk at 888-MY-BIZ-HELP. The organization also offers a Small Business Recovery Quick Guide and a Chambers of Commerce Recovery Quick Guide online.

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    For additional resources, see Business Report‘s Resources and Information to Help Guide You Through Recovery and the Louisiana Flood Resource Center published by our sister publication, 225 magazine.

    Contact us

    If there’s a disaster recovery-related topic that you’d like to see addressed in tomorrow’s edition of Daily Report Extra: Helping Capital Region Companies Rebuild, send us an email.