NEW YORK (AP) - Tornadoes and storms that have swept through the South and Midwest this year have been a reminder to small business owners everywhere that disasters can wipe out a company within a matter of seconds. And rebuilding can be a long, expensive process.
Business owners can limit the amount of financial and emotional damage they suffer by putting together a disaster preparedness plan. Northfield Savings Bank, a 13-branch bank in Vermont, was ready when Tropical Storm Irene swept over the state last Aug. 28. Tropical storms usually don't take a heavy toll on inland states like Vermont, although the region has occasionally been soaked by the remnants of hurricanes. But this time, Northfield's 2,500-square-foot branch in the central Vermont town of Waterbury was "totally consumed," said CEO Tom Pelletier.
"We knew on the Thursday and Friday preceding the storm that the probability of our experiencing heavy rain was very real," Pelletier said. "As it tracked the East Coast, we were following it very closely."
Because Vermont is a mountainous state, towns and villages tend to be located in valleys and near rivers. That makes towns like Waterbury vulnerable to flooding from an intense storm. By Friday night, with the storm wreaking havoc in the South, the bank began putting its plan into effect at six branches including Waterbury. Meanwhile, the entire town was preparing to evacuate.
A big part of the bank's plan was being sure that employees would be safe - and for everyone to have contact numbers for one another. That is one of the most important parts of disaster planning. "We knew where everyone would be," Pelletier said.
Then employees at the six branches spent several hours getting as much furniture and equipment as possible off the floors in the offices and basements. The bank's other seven branches weren't in a flood zone, so similar precautions weren't taken at those offices.
On Sunday, the storm hit, and "the volume of rain was significantly more than initially forecast," Pelletier said.
Irene dumped as much as 11 inches of rain on parts of Vermont, causing floods that devastated homes, businesses and farms. Waterbury was one of the hardest hit parts as the Winooski River overflowed its banks, and Pelletier said there was four feet of water in the branch on top of a completely flooded basement.
"Once the flooding was inevitable, even with all the planning in the world, there was nothing we could do" to prevent the damage, Pelletier said.
The branch was a mess. Its furnishings - which had been brand-new after a recent $250,000 renovation - were ruined. The receding floodwaters left behind mud and debris. The only items that could be salvaged were several computer keyboards and monitors that were placed high enough to escape the floodwaters.
The good news was that the bank's information about customers and their accounts was held in computers at a central remote location, so none of the data was lost. The nearest Northfield branch was just 15 minutes away, in Montpelier, so customers could do their banking there.
But the flood did hit the bank's safe deposit vault. About 30 customers who had safe deposit boxes lost their property, including documents like wills and deeds.
THE AFTERMATH AND RECOVERY
The bank knew it couldn't wait for the branch office to be rebuilt for it to reopen. And it didn't have to. For many years, it has paid an annual retainer for what's called a "bank in a box" - a 72-foot trailer that serves as a full-service mobile banking unit. It arrived from Pennsylvania just a few days after the storm. It took several days to hook up, but the mobile branch was operating the following week.
Pelletier said that "going into 2011, in our budgetary process, we wondered, 'do we need to continue paying for the bank in a box?' It turned out to be the best investment we ever made."
The bank had also arranged before the storm for contractors to immediately arrive and assess the damage and begin repairs. But the building needed more than repairs - by the end of the week, contractors had gutted the branch. By early March it was rebuilt, and its grand reopening was Friday, April 6.
Because the bank had flood insurance - which must be purchased separately from a standard business insurance policy - the cost of rebuilding was mostly covered by that policy. The bank did not say how much it cost to rebuild.
The bank also helped its safe deposit customers replace their lost documents. Their losses would have been covered under their homeowners' insurance policies.