Even though Superstorm Sandy hit more than five months ago, the full effects of the storm have yet to be realized. However, part of that picture, namely the devastating effect the storm had on small businesses, has become clearer in recent weeks, thanks to new research.
The study found that 52 percent of small and medium-size businesses in New York City, New Jersey, Connecticut and the surrounding areas said they experienced a sales or revenue loss because of the storm.
A number of factors led to the loss of sales for small businesses, researchers found. Seventy-four percent of small business owners had to close their doors after Hurricane Sandy. Seventy-one percent of small businesses owners also say they lost power as a result of the storm, while 56 percent lost phone and Internet connectivity. Eleven percent of small businesses experienced structural or property damage.
In addition to service interruptions after the storm, small businesses also reported issues with employees being able to get to work and problems with suppliers being able to reach businesses with deliveries.
"Our research shows that loss of connectivity had a big impact on small business owners, which affected their ability to contact customers and keep their businesses open," said Ray Sprague, senior vice president of the Small Commercial insurance segment for The Hartford, which conducted the research. "We have found that small businesses who take the steps to prepare and protect the business, such as establishing emergency communication systems and backing up critical data, tend to be the ones that can prevail after weather emergencies."
With the experience of Sandy under their belts, business owners have made plans on how to deal with future storms. Eighty-seven percent of small business owners say they were equally or more prepared than other business owners in their area for Sandy. The researchers found that a majority of small businesses were unprepared before Sandy.
Just 25 percent of small businesses had backup codes of critical programs and data before the storm. Even fewer, 20 percent, say they had protected their building from the storm or prepared an emergency survival kit.
Now that businesses have learned their lesson from Sandy, they have the following advice for other small businesses that were fortunate not to be affected by the storm. First, small business owners say fellow small business owners should review their property insurance policies. Additionally, small business owners advise others to invest in a generator, create a backup of important records and develop a contingency plan to follow in the wake of future storms.
The research was based on the responses of 451 businesses in the areas affected by Hurricane Sandy.