Developing Survival Strategies
Consider these facts regarding the importance of small businesses:
Some things that have been learned about business disaster survival:
- 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
- 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:
What do businesses typically experience after a disaster?
- 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.
A typical common post-disaster scenario:
- 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.
Some factors that contribute to business failure:
- 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.
- 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: