The Aftermath of Disaster: How Small Businesses Survived
Employees at Performance Heath Products watched as this tornado headed toward their factory.
CREDIT: Linette Cosper
When a tornado hit the town of Cullman, Ala., last month, the employees at the Performance Health Care Products factory sought cover in an underground shelter and were lucky to escape with their lives.
Employees at the company, which makes scrubs and sleepwear , watched as a giant funnel cloud bore down on them and the factory was spared as the tornado destroyed buildings just 200 feet away. In the days after the tornado, workers were able to do some manual work without electricity, cutting fabric with scissors and knives. With electricity restored last week, all of its employees have returned to work.
The company escaped relatively unscathed, but recovering from disaster can be a challenge for any business. It’s an especially daunting task for the nation’s smallest firms, as Jamie Silvestri can attest.
Flood waters devastated Silvestri's auto parts business in March 2010, claiming his entire inventory and rendering the building inoperable.
Twelve days later, he was back in business.
The quick turnaround, which earned Silvestri this year's Phoenix Award for Small Business Disaster Recovery from the U.S. Small Business Administration, underscores the necessity of disaster preparedness.
‘Full steam ahead’
Record-breaking rains last year caused flooding throughout Rhode Island. One of the hardest-hit areas was the town of Westerly, which saw homes and businesses washed away from the flood. Just feet from the Pawcatuck River, Silvestri said water flooded the entire basement and first floor of his NAPA Auto Parts franchise.
"We could not get back to the store for three days," Silvestri told BusinessNewsDaily. "It would have been very easy for us to fold our tent and go home."
Instead, he got to work figuring out how -- and, most importantly, where -- to reopen his business.
The fact that Silvestri had already been in the market for a larger store was an advantage -- he had previously scouted out a few places.
After choosing a new location, he said, it was full steam ahead to reopen as soon as possible -- with the knowledge that being closed any longer than necessary could potentially sink his entire business.
"It would have crippled us," Silvestri said.
It was around-the-clock work to get the proper licensing, inventory, signage -- and everything else that goes into opening a business -- taken care of.
Silvestri relied on retirement funds, a $300,000 loan from the SBA, and help from friends, family and 40 employees from NAPA’s corporate office to quickly re-launch his business.
From the ashes
Barry Dicken knows Silvestri’s struggles all too well. Just last week, he reopened his Planet Bike shop in East Brunswick, N.J., after being closed nearly three months following a fire.
The blaze was so devastating that, like Silvestri, Dicken was forced to look for a new home for his store. He scrambled to find a new location to get the shop and running in time for the summer season.
“It (the fire) ruined all of my inventory,” Dicken said. “But I didn’t want to lose the businesses I had built for 15 years.”
Dicken said the key to rebuilding his business -- which meant getting all new inventory, display cases and signage while tackling the issues of advertising, licensing and insurance -- was to keep a positive attitude.
“It is a stressful time,” Dicken said. “All we could do is say, ‘Let’s make the best of it and see what we can do.’"
Coming back from a disaster is an emotional process, Silvestri said -- so much so that he advises anyone in a similar situation to find someone who doesn’t have a major stake in the business to oversee all the work.
"You need to have someone unemotionally attached to the business to act as a clerk of the work," Silvestri said. "You can't be making irrational decisions.”
He also said business owners shouldn’t be afraid to lean on friends and family in a disaster’s aftermath.
"You need to throw your dignity and pride out the window," Silvestri said. "You have to ask for help.”
He said little things, such as community members dropping off food to make sure everyone was fed while the work went on, made a big difference.
"We had unbelievable support from the entire town," Silvestri said. "I couldn't have done it without them.
While no one wants to think about the possibility of a fire, flood or other disaster wiping out their business, it’s important to do so, said Diana McClure, business resiliency program manager for the Insurance Institute for Business & Home Safety, and there are specific steps owners should take to ensure they’re as prepared as possible .
“The more you have planned ahead, the more comfortable you will feel should something happen,” McClure said. “There is a lot you can do ahead of time to minimize the potential damage.”
She suggests taking stock of your business and determining which pieces are integral when it comes to getting day-to-day work accomplished.
“You need to go through the process of thinking about what is critical and prioritize,” McClure said. “Think about what you need to do those critical functions.”
Conducting a vulnerability assessment also is a wise step, McClure said.
“You want to know, ‘What is it that might threaten my business?’ and what those consequences would be,” she said.
After determining potential threats, mitigate as many as possible in advance, McClure advised. If there’s any chance of a flood, for example, ensure that all critical documents are not stored in the basement or a place where they may get damaged. In an earthquake zone, McClure said, businesses should make sure that shelving units are bolted to the floor.
Other preparations to consider, McClure said, include determining alternative locations from which to run the business, having proper IT recovery systems in place and maintaining current contact information for your employees, so they can be easily reached in the case of a disaster.
In the end, she said, getting back on your feet quickly -- as Silvestri and Dicken did -- is key.
“You want to minimize your down time to preserve your reputation and maintain customers,” McClure said.
A complete preparation checklist is available on the IHBS website at disastersafety.org.