Debris, Damages, and Jobs in Limbo: Hidden Costs for Small Businesses After Hurricane Florence

Although the Goat & Compass didn’t open until 2007, the cinderblock building has been around for decades and survived other hurricanes with minimal damage. Hurricane Florence was not just another storm.

“When we started preparing for the hurricane, it was a [Category] 4,” recalls bar owner Scott Wagner. “We boarded up the windows and doors, moved all of the patio tables and chairs indoors and hoped for the best. This building has been through a lot and we expected it to pull through just fine.”

Hurricane Florence, which was reduced to a Category 2 hurricane when it made landfall on September 14, wreaked havoc in North Carolina. The storm dumped more than 30 inches of rain on coastal cities, breaking rainfall records; it toppled trees, downed powerlines and led to widespread flooding that put major roads underwater, cutting off the coast from the rest of the state. Before the hurricane was over, the National Weather Service issued tornado warnings for several counties along the North Carolina coast.

“I saw the pictures and my stomach sunk.”

Before Wagner could get to the Goat & Compass to assess the damage, a friend who lived in the neighborhood sent photos. The storm took its toll on the bar: Trees took out part of the cinderblock wall and roof and knocked down the fence around the beer garden.

“I saw the pictures and my stomach sunk,” Wagner says. “I was questioning whether we’d be able to reopen.”

Three days after the hurricane made landfall, Wagner went to check out the damage and was surprised to find the power and WiFi were both working; the kegs were still cold, too. He put a tarp on the roof and let the locals know he was open for business.

“People were very grateful to have a beer and a break from reality,” he says. “They sat in the a/c, charged their cell phones and shared stories. It was a little bit of normalcy during a very difficult time.”

In the week following the hurricane, experts are still tallying storm-related damages. Moody’s Analytics estimated that Hurricane Florence would have an economic impact between $38 and $50 billion; the Wall Street Journal reported that private insurers were preparing for up to $5 billion in total claims, including damages to commercial properties and business interruptions.

Some of the roads leading to the coast remain impassable, making it impossible for adjusters to reach some North Carolina cities to assess damages and many small businesses are still in recovery mode.

The aftermath of Hurricane Florence is devastating for many small businesses that were in the storm’s path. But they are not isolated. Hurricanes and flooding – from Florida to Houston – can be catastrophic for small business owners, who are left to deal with insurance claims, lost revenue and debris long after the TV news cameras leave town.

“I’m on pins and needles waiting to hear if I’ll get enough of a settlement to come back from this.”

Brooke White is unsure when—or if—Sound Fitness will reopen. Her New Bern, North Carolina, gym sustained major water damage after wind blew off the roof, exposing the interior to massive amounts of rain. White calls the building, “A total tear out.”

All of the fitness equipment is ruined and White is awaiting news from the insurance adjuster about the amount she can expect to recover in damages—and whether it will be enough to purchase brand new equipment.

“I’m on pins and needles waiting to hear if I’ll get enough of a settlement to come back from this,” she admits.

In the meantime, the 12-person staff at Sound Fitness, including personal trainers, group fitness instructors and front desk staff, are out of work. White is keeping in touch with them via email, assuring them she’s working to clean the mess, settle the insurance claim and figure out next steps; she understands that her staff might not be able to wait.

“Some of my employees are already asking, ‘What’s your plan? When will you reopen?’” White says. “When my employees aren’t working, they aren’t getting paid. If they find other opportunities, I have to let them go.”

Wagner has relied on text messages to keep in touch with the staff at Goat & Compass. Two of the bartenders are back to work; the remaining four employees, who evacuated to Virginia and other parts of North Carolina, are making plans to return and, according to Wagner, are grateful to have jobs waiting for them. Wagner has also offered shifts to bartenders from another local bar that is still recovering from the storm.

At Neuse Sport Shop, staff were prepared for the storm. After significant damage from previous storms, Russell Rhodes, president and CEO of the Kinston, North Carolina, retailer, created a disaster plan. He put it into action in advance of Hurricane Florence, calling in his 50-person staff to move $3.5 million in merchandise to a secure storage unit on higher ground.

More than 20 inches of rain fell in the store, causing an estimated $1 million in damages. Flood insurance will only cover half the cost of the repairs and, Rhodes notes, “Flood insurance doesn’t cover business interruption and we’ve been closed 14 days during our busiest season.”

Rhodes expects the 75,000-square foot store to reopen this week and feels optimistic about bouncing back from the hurricane—in large part because he had a disaster plan in place and dedicated staff to put it into action.

“Without [those things] we couldn’t have withstood something like this,” he says.

Neuse Sport Shop is fortunate; other businesses are still struggling to file insurance claims; waiting on adjusters to estimate damages; cleaning up debris; and looking for contractors to complete building repairs.

The U.S. Small Business Association, in partnership with FEMA, has set up Disaster Recovery Centers in several coastal cities to help business owners develop recovery strategies and provide long-term, low-interest disaster loans to help with cleanup costs and economic losses.

As the storm waters recede, White worries that support for small businesses that suffered the wrath of Hurricane Florence will fade, too.

“The media came to cover the storm and sensationalized all of the damage but most of the coverage ended when the storm was over,” she says. “The community has really rallied around the local businesses but, outside of this area, no one sees the pieces that have to be picked up and what has to happen for small business owners to rebuild viable businesses again.”