Small Businesses Hit Hard By Climate Change, Struggle To Recover

Katie and Curtis Ferland’s viral wedding photo in Sonoma county     Photo: Karno Roa/kmrphotography.com

The Houston Chronicle published an eye-opening story about how extreme weather events are leaving many small businesses in ruins.  The paper reported that, according to the Federal Emergency Management Agency, nearly 40 percent of small businesses never reopen following a natural disaster, and another 25 percent fail within months.

  • The paper tells the story of Sam’s Safety Equipment (ironic, we know) — a local oil and gas outfitter (even more ironic, we know) — that was already struggling after hard times hit the oil business in 2014.
  • Sam’s canceled their flood insurance to save money only to be hit with a series of floods starting in 2015, and because their flood insurance price kept going up, they could never afford it again.
  • Eventually, they closed their doors last June and even then their inventory that they hoped to liquidate was destroyed by Tropical Storm Imelda in September.

Why This Matters:  Big companies can recover from extreme weather events, but small businesses with slim profit margins will struggle to stay afloat.  We already see this trend with family fishers and farmers and outdoor recreation and tourism small businesses who have lost everything and then cannot come back. The viral wedding photo above makes the business risk crystal clear. Red states along the Gulf of Mexico may be ground zero of this phenomenon, along with California.  Helping small businesses recover is another climate impact we will need to deal with in the years to come given the increase in the frequency of extreme weather events.

Small Businesses In California Burned by Power Outages

Even preventing disaster can take its toll on small businesses — the business interruption can be as costly as property losses caused by the fires.  For example, Sonoma News has reported that in Sonoma County, California, some small businesses (like grocery stores) have lost inventory due to power outages, and others in the tourism business have experienced losses due to cancellations during October’s peak season in wine country.

After three years of wildfires, Sonoma county may lose its allure as a destination, putting tens of thousands of tourism jobs at risk.

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