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A composite image of Laurie McCurlie, Janet Cockburn and Penny Chapman. These businesses endured hardships - including a divorce, cancer and a devastating fire - and bounced back stronger than ever.

They are devastating scenarios for any business owner: a welder's spark on a September morning ignites a fire that burns your factory to the ground by mid-afternoon; the breakdown of a marriage, which threatens the successful company co-founded by spouses, or the recurrence of breast cancer.

Setbacks like these can derail any company, but these resolute Canadian businesses rebounded: Chapman's Ice Cream Ltd., an independent ice cream manufacturer in Markdale, Ont. and two Hamilton-based companies, MJM Media Inc., an audio and video production house, and Janac-Mastectomy Wear, a sole proprietorship that makes sports bras and the Been-A-Boob prosthesis for women after breast cancer.

Here's how these three companies coped:

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Chapman's Ice Cream Ltd.

After fire destroyed their factory in 2009, David and Penny Chapman, who founded Chapman's Ice Cream in 1973, rebuilt the company to become Canada' largest independent ice cream manufacturer, reporting a 20 per cent sales increase last year alone. Son and vice president Ashley Chapman attributes the company's swift recovery to insurance and his parents' sound fiscal management that included not overextending lines of credit and not expanding, building or doing anything without the money in the bank.

Two decades before the fire, the company invested in business interruption insurance that would pay for anything over normal costs of doing business in different sorts of disaster – that would cover them for replacing the product or equipment as well as maintaining their labour force so any salaried employee would be covered for one year from the date of the incident and all hourly employees covered for four months. While the initial cost was high, it proved critical to rebuilding the new factory, as was their habit of having cash on hand.

One major worry at the time of the crisis was that they wouldn't get enough money from the insurance policy quickly enough to maintain their position in the market.

"We have the most sought after real estate in the grocery store – the frozen food section – so the biggest concern throughout the entire ordeal was losing our spot in the freezer," explains Ashley Chapman. "Our competition was in the head offices of stores days after the fire saying, 'Look, Chapman's can't bounce back in any reasonable time so just drop them and take our product.' Where we succeeded was that seven weeks after the fire, we started producing ice cream again in a temporary facility here in Markdale. As far as our competition was concerned, that was an impossibility."

While the building still burned, David Chapman phoned all his equipment contacts, including suppliers at a trade show in Chicago, telling them that he wanted to buy pretty much all the ice cream manufacturing equipment on display, recalls Mr. Chapman. The family also acted quickly on a junk mail flyer that arrived by coincidence from the U.S. about an ice cream company that had gone out of business and was – ironically – having a fire sale.

"Our VP of operations hopped on a flight with a big bag of money and went down to the sale to buy equipment," says Mr. Chapman. "We had lost everything in the fire and this seemed to just come out of the blue. It was like fate intended it."

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While manufacturing had all been in one place, thankfully the company had a dry warehouse about a block away with nearly $12-million worth in inventory of frozen ice cream products so they could keep on selling while they set up manufacturing in temporary facilities.

"The chances of actually recovering without anything would have been exponentially more difficult," says Ashley Chapman. "You always have to think about the logistics of your business. Is all your manufacturing in one spot? Are your warehouses attached to the same building? You never think about things like this unless you're thinking about disaster recovery."

But as fortunate as the company had been during the recovery period, Mr. Chapman says they failed to protect their data. Despite having an IT department and infrastructure, the backup tapes of business transactions weren't taken off site as they should have been, resulting in a loss of all their information, including customer pricing, invoicing and contact lists. The company now takes hard copy backup off-site every day to store in a secured location.

Mr. Chapman's advice: Don't take chances with your data infrastructure. Don't overextend your credit lines or expansion. Borrow the least amount needed from the bank. Make sure you have an excellent insurance broker and go with a major player with the experience to put together these very complex insurance policies.

MJM Media Inc.

When Laurie and Mike McCurlie divorced 13 years ago, they decided to continue jointly running the audio and video production company they co-founded in 1981. Being in business together took its toll, according to Ms. McCurlie, who feels that the long hours with no breaks away from each other contributed to the marriage breakdown.

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But since business was thriving – and has continued to do so, with revenues increasing by 70 per cent since the divorce in 2000 – the couple didn't want to lose their income as well as everything they'd worked to build together. So they divided the business into two separate distinct departments – with one set of books – still the way they do it now.

"In the beginning we both did everything, but when we divorced, that became difficult," says Ms. McCurlie. "So we literally split the company in two. I had my own staff and we did video production and Mike had his own staff for audio production, although he continued the post-audio production on my videos. Over the years, it's become easier. We respect each other for our differences where as in the old days, we were chafing at them."

While the new arrangement was awkward at first, they tried to keep mutual eye rolling to a minimum, so staff relations and business didn't suffer as a result. The biggest difficulty for Ms. McCurlie in the first few years was trying to separate the business from the emotion.

"You know each other so well and you each have your little hot buttons of how to get under the skPein of the other person, so we had to remind ourselves to just forge ahead," says Ms. McCurlie. "You just put one foot in front of the other. I didn't really stop to think about a strategy. It was more, how do you get through the next month?"

The McCurlies didn't have a shareholders' agreement until a few years ago when Mike McCurlie got remarried. Ms. McCurlie says the level of trust she has with her ex is still there, but when other people are involved, it has to get a little more structured.

"It hasn't really changed anything, but we know there's a binding agreement in place that protects both parties," says Ms. McCurlie. "We're just starting a long term succession plan now which has made us come together a lot more."

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Ms. McCurlie's advice: I have a friend who's going through divorce with a business partner and there's a lot of animosity. It's a business. It's best not to get emotional about it. Emotional duress doesn't help you make the best decisions.

Janac-Mastectomy Wear

After her recovery from cancer in 1995, Janet Cockburn joined a group of breast cancer survivors who were starting a dragon boat team. But the women soon discovered that the sports bras on the market had no pockets to tuck in a prosthesis.

Encouraged by her teammates, Ms. Cockburn started up Janac-Mastectomy Wear, a sole proprietorship, to manufacture sports bras as well as a prosthesis she christened the Been-A-Boob, designed to react more like a natural breast during exercise than the silicone type.

After doing the research and finding a local manufacturer, she funded the business herself and launched in 2004. Janac currently supplies about 60 retailers across Canada as well as stores in the United Kingdom, U.S. and Switzerland.

"My only outlay was having the samples made and getting a website up and running," says Ms. Cockburn, who managed to get $50,000 in funding from her pitch on CBC's Dragons' Den in 2008. "But I got breast cancer again in 2009, which put the business back. The money from the Dragons helped keep it going because otherwise, I don't think it would have survived."

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Shocked at being hit with cancer a second time, she had neither disability nor business interruption insurance. Although she still did the everyday paperwork and was able to hire someone helping with orders, Ms. Cockburn says the most difficult part was getting out to meet with retailers.

"When I was going through treatment, I didn't have any hair and wasn't feeling up to promoting the business," says Ms. Cockburn, "Unless you have a sales rep visiting them, your products can get pushed aside."

She credits her daughter-in-law with having a big hand in keeping the business going while she was ill. Having someone she could rely on and trust was invaluable, she said.

Now in good health, Ms. Cockburn wants to see the business go on, but the threat that she could get sick again is always there in the back of her mind. Going into debt to reach the next level, she says, could be too stressful.

Ms. Cockburn's advice: We always say you're not a survivor of cancer; you're living with cancer. But don't let it take over your life.

Tips on how to prepare for the unexpected

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David Crisp, president of Crisp Leadership Strategies in Toronto, has this advice for business, whether big or small:

Write down the 20 things you think can happen, the problems you'd be faced with and what you need to put into place to get back up and running. If something bad happens, just knowing you've worked that out can make you calmer.

Once you've looked at the potential catastrophes to your business, decide which ones you need to insure. The problem for small companies is that they can't buy insurance for everything because it's too expensive, so they should zero in on the one or two key things they really need. The larger you get, the more you need an insurance broker to guide you through the maze of insurance. When you're very small, a broker may be overkill, but they do know the market. Business interruption policies can generally be tailored a bit to fit different types of business. In addition, you might buy disability insurance so that if you're sick, you'll get payments until you're well. However, when you have a pre-existing condition, such as cancer, you may end up paying much higher premiums. Then you have to assess it from a cost/benefit point of view.

If you don't have cash on hand, you can negotiate with your bank using your insurance policy as collateral while the claim is being processed. Generally the bank will give you a bridging loan for at least part. The bank may also give you a holiday on payments. Go to your bank immediately, explain that this is a temporary situation and ask to defer your payments. That's better than not paying when the payment comes due.

Anyone who goes into business with a partner, whether or not they're a spouse, should have a legal plan of what to do if the partnership fails. You have to sit down and talk about it, even when that feels difficult. You may not foresee everything. but if you're not getting along, at least the framework is there for a discussion.

Special to The Globe and Mail

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