Developing Survival Strategies

Facts

 

Consider these facts regarding the importance of small businesses:
  • 53% of private non-farm workforce
  • 47% of all sales
  • 51% of GDP
  • 3/4 of new jobs (while large companies downsize)
  • Provide entrepreneurial spirit that drives innovation
  • 67% of initial job opportunities
  • Initial on-the-job training
  • Jobs for under 25 and over 65
  • Key to social-economic dynamics of community

Some things that have been learned about business disaster survival:
  • Loss reduction does not ensure business survival
  • Most businesses don't fail immediately
  • Most losses don't occur during or right after the disaster...they occur from:
    • business interruption
    • lost income to employers and employees
    • lost assets in the form of business equity
  • Most owners fail to consider their options before trying to recover

Some of the factors that aid survival:
  • Having fewer eggs in one basket:
    • Doing business in more than one location
    • Having customers in unaffected locations
  • Financial strength/market share
  • More flexible/innovative entrepreneurs
  • Being further from ground zero
  • Size--larger is almost always better

Some historical facts regarding post-disaster business survival:
  • Manufacturing businesses do better - they have geographically diverse customer base.
  • Retail sales & service organizations don't do as well--they are geographically concentrated.
  • Construction supply businesses do better by virtue of the nature of their products.
  • Fast food restaurants do better than finer restaurants.
  • Upscale specialty shops don't do well, especially if they involve discretionary rather than essential expenditures.

What do businesses typically experience after a disaster?
  • Stress and uncertainty in personal life
  • Ambiguity if both home and business damaged
  • Family pressures and concerns
  • Stress from stressed employees
  • Stress from insurance delays--questions about coverage and settlements
  • Second guessing (what you should have done)
  • Assurances from business people, property owners and public officials that things will soon get back to normal--they won't.
  • Social pressure from other business people
  • Pressure to meet business obligations
  • Slow/contradictory information from city officials regarding rebuilding plans
  • Slow responses from state and local governments regarding variances and recovery policies
  • Many customers and businesses will move away. Many permanently
  • Volunteers and contractors will come and go
  • Neighborhoods will change. A new set of relationships, new neighbors, and new business patterns will develop.
  • Hurricanes are often 360 degree events involving home, family, livelihood and self esteem.

A typical common post-disaster scenario:
  • Businesses rush to clean up mess and put things in pre-event order.
  • Only after months of not getting back to business as usual...some recognize it's never going to be the same.
  • Some devise effective business strategies (i.e., relocate, change products/services, change processes).
  • Some can't come up with strategies (trapped by punishing lease provisions, shortage of capital, apprehension about change).
  • Some don't recognize changes, exhaust resources and options, and, over time, perish.

Some factors that contribute to business failure:
  • The effect of the disaster on your customers
  • The kinds of products or services you offer
  • The inability or unwillingness to respond appropriately to the new post-disaster environment
  • The overall financial strength and stability of your business before the disaster
  • The inability or unwillingness to recognize your available options

 

 

 Hurricane Planning Directory: