Business Financial Emergencies

Business Financial Emergencies happen every day in every community.

Business financial emergencies

FEMA Photograph by Dave Saville

Very small to medium businesses are especially susceptible. For small businesses Personal Financial Emergencies often become Business Financial Emergencies.

FEMA notes that 40% of all businesses closed due to a disaster will not re-open.  Crisis Prevention and Restoration is breathing life into business.


July 13, 2012 – Elaine Pofeldt in American Express Open Forum discusses Emergency Funds –

“If there’s one lesson that came out of the Great Recession, it’s to keep a cash cushion so your business can ride out disaster.

But how much should you tuck away? And where should you put the money? Those are not easy questions to answer, and there’s a personality component to them too. What feels like a comfortable safety net to one person, may feel like an inefficient over-allocation of cash to another.

Tony Ellison, CEO and founder of online office products retailer Shoplet, extends his emergency fund beyond employees’ salaries to cover 401(k) matches, bonuses and profit sharing, too. Shoplet also keeps some money available to cover unexpected growth opportunities. While these additional funds are not specifically set aside for emergencies, they do allow the firm to quickly move on new opportunities. In other words, build a “sunny day fund” to complement your rainy day fund.”

Elaine shares great knowledge and I recommend reading her full article – Does Your Small Business Have an Emergency Fund?

Though written for Personal Financial Emergencies as all small business owners know Business Financial Emergencies are often in direct correlation.

 notes in his article “How and Why to start an Emergency Fund” on Get Rich Slowly:

Robert Pagliarini, in The Six-Day Financial Makeover: Transform Your Financial Life in Less Than a Week!, declares that an emergency fund is the most important financial step after taking care of basic living expenses. “Your emergency reserve is your financial cushion in case something goes wrong and you lose your job or you need access to money quickly. Your emergency reserve should consist of at least three months’ worth of cash. Once you’ve saved enough for the cushion, you can [move on] to other goals.”

The Wall Street Journal‘s The Wall Street Journal. Complete Personal Finance Guidebook (The Wall Street Journal Guidebooks)  says: “How much is enough? The answer is different for different people in different situations. For those in careers with a large, ongoing demand or who have relatively strong job security, three months’ worth of expenses is probably enough of a cushion. Those with bigger career demands, such as higher-paid managers and executives or couples who work in the same industry or at the same company, might want nine months to a year’s worth of expenses in the bank. Yes, that’s a lot of money to save, but financial security is a game won by the most prepared to outlast the tough times.” Use a money market account for your emergency fund, the book recommends, but keep several hundred dollars in cash someplace safe in your home.

Get Prepared: Review and Update Your Financials

Safeguarding your finances and important records is easy if you start now. These steps can help you get started:

  1. Identify your important documents and place them in a safe space: You can use the Safeguarding Your Valuables activity and Emergency Financial First Aid Kit to help get you started.
  2. Download phone applications that can help during emergencies: Use the FEMA phone application to access to disaster preparedness, response and recovery resources including disaster assistance.
  3. Enroll in Go Direct to minimize disruptions to receiving any federal benefits you may receive.
  4. Plan ahead of time to recover: Our partners at USDA have created great resources to help get you started including Recovery After Disaster: The Family Financial Toolkit and the Disaster Recovery Log.

FEMA has worked with our federal partners from the Financial Literacy Education Commission and whole community partners to compile resources that can help you get involved in strengthen your home, your job and your communities ability to be financially prepared. We encourage you to use the tools below and start early on being financially prepared.


Talk to your banker, wealth management specialist, tax specialist and bookkeeper for more ideas on how you can prepare.  Saving can be a challenge – it’s true – it can also though move you and your business out of a crisis or emergency.


52 Steps to Business Prep is an easy way to get your business ready for the unexpected. 


Who needs an Emergency Restoration Plan? Every business. Crisis can happen from within the business itself (health or medical emergencies, financial troubles, employee issues), along the supply chain (vendor failures and closures) or from outside (natural disasters).

Restoring Business the Morning After begins long before there is a need.  Crisis Management works best when Business establish an Emergency Plan.  Just like a Marketing or Sales Plan a Business Emergency Plan sets the foundation for how a Crisis will be handled and managed.  Major disasters use Incident Commanders to set the standard.  Small business rely on owners and managers. Effective Response requires practice, knowledge and a support team of experts. Crisis Prevention and Restoration is here to help you plan your Emergency Response Team. CPR4Biz – Breathing life into business.