By Rohit Prakash, Co-founder and CEO of Townsquared
When disaster strikes—such as Hurricane Matthew or the recent bombing in Chelsea, New York—nearly everyone suffers in some way. Local businesses lose revenue, structures, staff, and customers. Large businesses typically have the bandwidth and deep pockets to recover quickly. Small businesses, unfortunately, are often left to their own devices, which may not be enough. Many do not survive.
How can small businesses survive and recover when disaster strikes?
When it’s a natural disaster
The Federal Emergency Management Agency (FEMA) estimates that as many as 40% of small businesses hit by natural disasters never re-open. The recent Hurricane Matthew has already claimed at least 25 lives and destroyed homes and businesses across five states. Small business owners should always be prepared for natural disasters by having the proper insurance and an evacuation plan.
If a natural disaster has wiped out your business location, there is nothing more powerful than tapping into your local business network. Contact business owners and see if they have room to share a storefront so you can continue bringing in revenue while determining your next steps. Local businesses in San Francisco did this when a fire destroyed buildings. This type of collaboration is not only a short term solution—it’s establishing long-lasting partnerships.
If you’re not in the path of the disaster, consider how you can open up your business to help your community get the resources it needs. A small business owner’s response to its community in a time of need can set them apart. For example, if you own a hotel or inn, you can offer special rates for those evacuated from their homes—a preferable alternative to a cot inside a gymnasium or shelter. If you own a coffee shop or restaurant, you can set up a stand or a food truck near an evacuation shelter and even connect with other local businesses to help make sure food and other essential resources are always available. Not only will this kind of assistance build community, but it will help you connect with your larger community and make connections you might not have otherwise.
A socio-economic issue
New York and San Francisco are ranked the highest in the country for both the size of their homeless populations and their skyrocketing office rents. And in both cities, small businesses have realized that if two voices are better than one, thousands are even stronger.
San Francisco recently made news when local and national press outlets came together to shed light on the effects of the homeless encampments expanding across the city. Local business owners have had the front doors to their businesses blocked by encampments, one local owner stepped on a needle outside of his business and is now undergoing two years of HIV anti-viral treatment, while other businesses have been vandalized. Local businesses are losing foot traffic, employees, and revenue but individually, businesses haven’t been successful in garnering the local government’s attention.
In this type of crisis, small business owners should tap into as many local organizations as possible. In San Francisco, local merchants and business organizations collaborated to schedule city-wide meetings inviting city officials, law enforcement and local press. They conducted interviews and spread the word as much as possible to educate local decision makers. They also set up an online forum where local business owners can report consequences and share updates and helpful information related to the homeless encampments.
In New York City, local businesses are being forced out of their business store fronts and the city is at risk of losing its character to large, faceless box chains. In an effort to give small business owners the right to fight for fair lease negotiations, the city’s local businesses, together with residents and advocacy groups, formed the political coalition TakeBackNYC. The objective of this group is to pass the Small Business Jobs Survival Act (SBJSA). Participating businesses have advertised the initiative and organized public forums to which they’ve invited city council members, in order to put the SBJSA in front of the local government.
On Saturday Sept. 17, a homemade bomb was placed in a dumpster and detonated in Manhattan’s Chelsea neighborhood. In addition to injuring 29 people, the attack forced many small businesses to close their shops. Small businesses expressed their concern after seeing local businesses in France see a decrease of around $500 million in tourism revenues following the series of terrorist attacks that occurred there. And, indeed, some Chelsea businesses saw a 50 percent decrease in sales. In an effort to drive revenue to those businesses affected by the explosions and increase foot traffic, New York City Council Members and the New York City Department of Small Business Services organized a Chelsea Small Business Crawl which took place on Sept. 24.
Another challenge can be a result of a city’s violent reputation. Such is the case with Oakland, California. Due to San Francisco’s tech boom, the Bay Area’s population has grown by more than 90,000 people over the last year. Rising housing and commercial rent costs have pushed businesses and residents into San Francisco’s neighboring towns. As a result, Oakland has become a hub for independent businesses while battling a decades-old crime epidemic. Local businesses are working together to draw foot traffic into their shops to counter the fear of the city’s crime. In 2009, Oakland retailers started a city-wide holiday campaign called Plaid Friday. The program aims to drive holiday shoppers to small, independent stores rather than large chain stores. Last year the campaign grew to include local musicians and pop-up music festivals and this year it is expanding into a weekend-long celebration. Additionally, a community called Oakland Grown has been created to increase awareness among consumers about supporting locally-based businesses in order to drive revenue back into the local economy.
At the end of the day, owning your own business is hard work and a disaster or other factors can make it seem impossible. However, much can be done to prepare for and recover from disasters. Most cities offer local disaster protection resources and your neighboring businesses can lend a hand. Tap into as many of these resources as possible. Disasters may be unavoidable, but if there’s one thing we’ve learned from watching local businesses face those challenges, it is that when disaster strikes a city, we’re stronger when we rise up and recover together.
Rohit Prakash is co-founder and CEO of Townsquared, the leading online community for small businesses. As the son of small business owners, Ro developed a true understanding of the problems they faced on a daily basis and was driven to protect small business and help them thrive.