Bouncing back from a disaster takes more than grit

The fire started at 10 a.m. and burned for three days.

But Ashley Chapman and his parents, Penny and David, didn’t spend much time watching their ice cream plant burn to the ground in 2009. They were on the phones.

“By 4:30 p.m., our entire senior management team was at my parents’ kitchen table and I was calling a party rental store about getting tables and chairs so we could put them in the dry warehouse and have some place to work out of,” recalls Chapman.

Deciding to rebuild Chapman’s Ice Cream, a close No. 3 behind Nestlé and Unilever in Canadian ice cream sales, “was the quickest and easiest family meeting we’ve ever had,” says Chapman.

“My parents just looked at me and said, ‘we can’t do this on our own. Do you want to rebuild?’ And I said, ‘absolutely. Let’s get this done.’ And in minutes we were on the phone making calls.”

No one was happier than the 1,400 residents of Markdale in Ontario’s Georgian Bay region.

Chapman’s Ice Cream started with four employees in 1993 and had grown to 350 employees. It’s now 500 plus another 200 in summer.

Business interruption insurance would pay the wages of hourly em-ployees for four months and full-time staff for a year. If rebuilding took longer than that, the Chapmans were prepared to reach into their own pockets to take care of everyone.

It never came to that, however, because co-packing arrangements had 200 of them back on the job in just four weeks.

“I guess we could have screamed at the heavens, but we just got to work,” he says.

It’s what you’d want to do on your farm if disaster struck. But could you?

For this is not just a story of determination and resiliency. It’s about having the resources to make a comeback, and that goes beyond insurance, although that is certainly critical.

The Chapmans are enormously thankful they kept paying the expensive insurance premiums. They nearly cancelled them two years before the $100 million fire.

However, money didn’t rain down afterward. Only a small fraction was paid in the first two months, at which point the insurance company offered them a deal: a quick payout if they’d settle for 65 percent of their claim.

“We said, ‘no thanks, we’ve paid for this policy for 20 years and we’re going to get 100 percent of our claim,’ ” says Chapman.

It took five years, and a pretty much full-time effort by the company’s vice-president of finance, to clear the innumerable hurdles to receive that 100 percent.

“Most businesses would have gone under well before then,” says Chapman.

“But because my parents saved every penny — not paying themselves exorbitant wages or buying yachts — we had a substantial war chest and we could start rebuilding.”

His parents are “old school” when it comes to debt and they funded all of their numerous expansions without borrowing.

After the fire, having cash on hand allowed them to build and equip a new 265,000 sq. foot plant, which now turns out more than 100 million litres of ice cream, along with numerous other frozen treats.

“If you can, you should have money in your bank account to draw on in addition to insurance,” says Chapman.

“You can’t always do that, but you should be putting money away instead of spending on the extras that some business owners indulge in.”

Lesson No. 2 is to back up your business data.

The Chapmans thought they were covered, but the backup was inexplicably left in the information technology manager’s office just before the fire. Some paper records miraculously survived, but the mistake was costly.

Fortunately, their mix makers had memorized every ingredient in every one of their priceless recipes.

“It doesn’t matter whether you’re a bank or have 50 head of cattle, do the right thing and back up your data,” says Chapman.

“It’s not just your crops or your cattle that matter. All that information you take for granted every day — what prices you sold at, your expenses — is very important.”

Like most farmers, the Chapmans view their business as something much more than a way to earn a living. It’s their passion, and the fire would have really been a tragedy if all they had been able to do was “sit around and think about it,” says Chapman.

Reviewing insurance with a broker or discussing cloud computing with a data backup company is a chore. And pinching pennies can seem silly in a time of cheap, plentiful credit.

But there are much worse things. Being prepared for them could be the best move you ever made.

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