What Small Firms Can Learn from Hugo
Hurricane Hugo hammered Joseph Binz’s entrepreneurial dream into a pile of debris. Nothing much remains of his Charleston, S.C., company, called Carolina Wipers, where five employees processed rags into disposable cloths.
John and Eleanor Dosher were more lucky. Their Charleston grocery store opened for business the day after Hugo hit, even though there was a hole in the roof and no electricity to operate the cash registers.
“We’re doing it the old-fashioned way,” Eleanor Dosher said. “We’re hanging in there.”
Small companies like Carolina Wipers and Dosher’s Food Store are particularly vulnerable to disaster, whether hurricane or earthquake, a more Southern California-like calamity, disaster experts say. A significant number of small businesses can be expected to fold after a catastrophe, and when that happens, serious damage can be done to the local economy, they said.
“You’re still hearing tales of woe from Whittier where a lot of small businesses didn’t have the wherewithal to continue” after the October, 1987, quake, said Jack Kyser, economist for the Los Angeles Area Chamber of Commerce.
In case of the much-predicted earthquake with a magnitude of 7.5 or more, “the small business community is going to take a major hit and that’s important because 94% of all the businesses in Los Angeles have 50 or fewer employees,” he said.
Most companies in Southern California--especially small businesses--will be caught napping when a major earthquake hits the area, said Paul Flores, executive director of the Southern California Earthquake Preparedness Project. The Pasadena-based agency is a project of the state Office of Emergency Services.
Part of the problem arises because of the precarious, day-to-day existence that many small companies lead. They think that they are too busy simply doing business to prepare for the inevitable earthquakes that hit Southern California and they seldom have the financial resources to weather a closure, even for just a few weeks, said Michael Durkin, an architectural and engineering consultant who conducted a study of small businesses after the 1983 Coalinga earthquake.
Durkin’s study found that one of every four businesses in downtown Coalinga was permanently closed by the quake and many of the rest took several years to resume normal operations.
Preparing Formal Plans
“Small businesses tend to be undercapitalized and they inhabit the most vulnerable kind of buildings” because of the low rents in older structures, the Woodland Hills-based consultant said. Getting ready for an earthquake “requires a decision from the small-business person without any real feeling that an earthquake is going to happen tomorrow,” he said.
More and more businesses are preparing formal disaster plans, although many are large companies that can afford to assign employees to the task, said Carl L. Strand, whose earthquake consulting business sells various disaster preparedness products. Disaster preparedness itself is becoming a growing industry--from companies that sell automatic gas shut-off valves to firms that operate “hot sites” to store computer data for other businesses.
Getting ready for catastrophe makes business sense, Strand said. “We need to keep filtering this information down to the little guys. When they realize that the big guys and their competition are doing something, then they get interested.”
For companies, simple steps like stocking generators, documenting inventory through records and pictures, bracing equipment and keeping a second set of detailed financial records away from the business site could make the difference between survival and bankruptcy, Flores said.
“One message is clear,” Flores said. “I think people should have some assessment of the facility that they reside in. After the building comes down on top of them, then it’s for naught.”
“You’ve got to treat an earthquake like a tax audit,” Durkin said, adding that detailed financial records are crucial to winning any kind of financial help after a disaster.
Creative Solutions
Hurricane Hugo destroyed the simple routines of everyday life when it ripped through South Carolina, North Carolina, Georgia and Virginia on Sept. 21 and 22 after hitting the Caribbean Islands.
Normal business could not resume immediately because most of Charleston, the city hardest hit, had no power for several days.
But creative solutions were found. Residents and businesses went back to basics. They helped each other. They relied on themselves, not on government services, which were overwhelmed.
Many of those businesses that could open found that they had trouble getting employees to report for work because they were cleaning and repairing their homes. So some companies hired crews and sent them to work on employees’ houses.
Many roads were impassable, traffic lights were out and debris quickly flattened the tires of the few venturesome motorists. Out-of-town Allstate claims adjusters, who were flown to the South Carolina capital before the storm, loaded their car trunks with tires when they left Columbia for Charleston so that flats wouldn’t leave them stranded.
Once in town, some Allstate representatives drove through Charleston neighborhoods in a motor home equipped with a generator, a computer and a megaphone to reach customers who had no telephone service. Sears, which owns Allstate, cashed Allstate checks at area stores.
Times staff writer Larry Green in Charleston contributed to this story.
