Weather forecasters said it was ‘the perfect storm’ and nicknamed it ‘Frankenstorm’ because of its sheer size and strength along with how much damage it would bring to the Northeastern coastline last year.
Sandy brought devastating damage in the form of wind, rain, and floods.
It wiped out multiple towns across the East Coast, ripped houses from their foundations, swept the Seaside Heights roller coaster into the ferocious ocean, replaced front yards with mounds of wet sand, and destroyed lives and thriving businesses.
In one night, Sandy destroyed millions of lives across the Northeast region.
Small businesses in the affected areas were impacted mostly due to power outages. With no phone or Internet service available, businesses were shut down for an average of seven days.
Two-thirds of small businesses on the East coast were directly impacted by Sandy.
“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.
“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.”
The Hartford Small Business Pulse: Storm Sandy surveyed New York, New Jersey and Connecticut small business owners to gain a better perspective of how Sandy affected their businesses.
The survey was generated three months after Sandy and concluded:
- 71 percent of impacted small business owners experienced power outage, which likely led to temporary disruptions in business operations;
- Approximately three-fourths (74 percent) of impacted owners had to close their doors for a period of time, and it took them an average of seven days to reopen;
- 52 percent experienced loss of sales or revenue as a result of Storm Sandy
- Customer issues (65 percent), employee issues (47 percent) and supplier issues (44 percent) were challenges for impacted owners during or after the storm;
- One-third (36 percent) of small business owners impacted said that they were impacted significantly;
- More male small business owners (42 percent) reported that they were significantly impacted compared to female small business owners (28 percent);
- In addition, more impacted respondents had to close their businesses for a period of time in New York (81 percent) and New Jersey (78 percent), compared to Connecticut (64 percent); and
- Impacted small business owners in New Jersey were more likely to have experienced power outage (82 percent) than those in Connecticut and New York (71 percent and 62 percent respectively).
The survey showed that the consequences of the storm will continue to stretch beyond the immediate impact of a week-long closure. In order to recover from Storm Sandy, small business owners who were financially impacted are taking action, including adjusting their business strategy (35 percent), cutting costs this year (32 percent), and scaling back or stopping hiring new employees (25 percent).
Based on their experience with Storm Sandy, impacted respondents reported they would give the following advice to fellow small business owners:
- Review your property insurance coverage (23 percent)
- Invest in a generator (21 percent)
- Create a backup of important records (15 percent)
- Develop a business continuity plan (14 percent)
“It’s important for small business owners to talk with their agents about the right insurance for their businesses and make sure they are prepared for weather emergencies,” said Sprague. “This can include everything from reviewing your current insurance coverage and addressing new needs to developing a business continuity plan. For business success, it’s critical to prepare for the unexpected and protect the business and employees, in order to prevail in the months and years ahead.”
Although many small businesses may not be situated close to the ocean front, other weather emergencies that can affect a small business to function after a severe storm include: tornados, tsunamis, hurricanes, cyclones, extreme heat, and winter weather.
Floods, landslides and mudslides are caused from weather emergencies that can also affect a small business from operating to full capacity.
Earthquakes are generally not weather related, but can cause a disruption to a small business if damage has been done and knocks out both electrical and cell phone tower power.
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