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Small Businesses Especially Vulnerable to Damaging Effects of Climate Change

Eric Justian
| Thursday August 1st, 2013 | 0 Comments
25% of small businesses  don't re-open after a major disaster.

25% of small businesses don’t re-open after a major disaster.

Thirty percent of the small businesses crippled by Hurricane Sandy never opened their doors again. That accounts for about 20,000 to 30,000 companies gone in one disaster. Whack! One day the lights went out and they never went back on again. Severe storms like that take a serious toll on small businesses. On average, about 25 percent of them never open their doors again after a disruptive disaster. Even without the damage or loss to property, equipment and merchandise, the down-time alone is enough to do in a mom and pop shop with an average loss of $3000 every single day.

A recent report issued by the Small Business Majority and the American Sustainable Business Council entitled Climate Change Preparedness and the Small Business Sector highlights how small businesses are particularly vulnerable to the effects of climate change. Unlike larger businesses, small businesses tend to be dependent on a single region for their customer base, all their assets are usually in a single location, and they simply don’t have access to the supply chains or capital larger companies do to bounce back from a storm ravaged city.

We all hear it over and over again: small business is the backbone of the American economy, employing half of the American workforce. They are the drivers of innovation, opportunity, and community well-being. Small businesses are a part of our communities in a way no other company can be.

Who doesn’t have a local diner where you know the owner, or that’s been there for as long as anybody can remember?

When I moved back to Michigan after being gone for ten years, I sat down at a diner where my family went after church when I was a kid, and the waitress looked at me and said, “Well, we haven’t seen YOU here in a while!”

That’s small business! And it’s more vulnerable than ever. And it’s not just about losing GDP. It’s about losing community when these places go under.

Extreme weather events are getting more frequent and worse.

A record 14 weather disasters costing over $1 billion each occurred in 2011, resulting in total economic losses of $60.6 billion, and 11 weather disasters occurred in 2012, causing more than $110 billion in damages. Specifically, Superstorm Sandy and the record-breaking drought that covered nearly two-thirds of the nation cost the U.S. approximately $65 billion, and $30 billion, respectively, in 2012.

While small businesses are the most vulnerable to these disasters, they also tend to be the least inclined to prepare. Very few small businesses have a disaster plan in place. You know, something to do with all the copious amounts of time small business owners have, right?  However, the report urges small businesses to develop one, possibly in coordination with other small businesses. The report offers another pathway to preparedness. Start a conversation with area leaders and officials and urge city-wide movement on preparedness.

There’s been a growing drumbeat of interest in creating “resilient cities,” cities prepared for disaster and ready to get back up and running after. The United Nations Office for Disaster Risk Reduction has issued a handbook to help mayors start planning a resilient city. It’s one step in the right direction to making a more resilient business and city.

[Image Credit Angellote - Source]


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