When compared to major corporations, small businesses have it rough. They don’t have the staff, resources, or logistical capabilities of larger companies. Imagine, then, the nightmare that so many small business owners awoke to after Hurricane Sandy devastated the East Coast. It’s for this reason that I’ve decided to discuss small businesses and the logistical difficulties they are facing after Hurricane Sandy – especially in regard to their supply chains. The following New York Times article is one of the few I found that exposed the grim reality so many small businesses will face in the coming months. Below is a synopsis.
The article begins with a story that perfectly illustrates the dire circumstances so many business owners found themselves in after Hurricane Sandy passed through the East Coast. Kristy Hadeka and Sean Tice – co-owners of Brooklyn Slate Company, a company that produces slate cheese boards – had been preparing for the holiday season when Sandy hit. As a small business, the company depends on the revenue generated during this time of the year. According to the article, holiday sales typically make up 75% of the company’s annual revenue. Instead, they found themselves dealing with a litany of other issues – a depleted staff, damaged inventory, halted UPS shipments, and even customer emails requesting arrival times for orders. Kristy and Sean even had to locate missing merchandise that was being transported to a Whole Foods store in Massachusetts.
Another small business, Linda the Bra Lady, had a similar experience. While the company did not experience any physical damage, co-founder Carl Manni explained that they did suffer financially as a result of the storm. Manni explained that due to damage sustained to several of his vendors’ warehouses, he was unable to procure the inventory he needed to fill online orders. He consequently had to back out of the orders – a decision that will cost him approximately $50,000 for this week alone.
Outside of lost inventory and stifled supply chains, the looming issue is that many of these business owners did not have insurance that covered a disaster of this nature. Consequently, many small businesses will have to file for bankruptcy if they do not receive disaster relief funds from the government.
Ultimately, I feel that small businesses have a much harder time dealing with catastrophes of this nature. Whereas large retailers can reroute their supply chain or reorganize resources to soften the punch Sandy packed, small businesses do not have the necessary resources to reroute orders or replace inventory – especially given the current state of the economy.
* The information provided in this post was drawn from the following New York Times article:
Questions to Consider
- How do the logistical challenges faced by small businesses differ from those faced by major corporations?
- In the aftermath of Sandy, who has the rougher road – large corporations or small businesses?
- Put yourself in the shoes of a small business owner, how would you have reacted to a disaster of this nature?
- Should the government help small businesses recover from this disaster?
3 thoughts on “Hurricane Sandy Causing Problems for Small Businesses”
I found your post very interesting related to this disaster to small business. There is no doubt that small businesses would face a rougher time than larger corporations because small business had a less diversified supply chain than large corporations, usually just one for a specific components of their businesses. In addition, because of the inventory turnover of small businesses is much slower than large corporations, the order costs is relatively expensive for them therefore they would have a relatively large size of order each time to reduece the order cost. Therefore, when suffer natural disasters, the damages of small businesses may force them to bankrupcy. I think what can small businesses do to mitigate damage from such disaster of nature is buying inventory issurance. In addition, they could always keep spare suppliers in case they need another one. The government should help small businesses recover from this disaster considering small businesses occupy a important role of east coast economy.
Coming from a family of small business owners and having their own shops, I can only imagine how it would have been for them if they were there. I know this because even without the nature disasters it’s hard on them trying to compete with the major companies and make a solid name out of themselves. Like it was mentioned in your post it’s easier for major companies after the storm to be able to get back up because they have a back plan to fall to and resources they can use, but the small businesses they get hit the hardest with little to choice to be able to get back up again. It will be interesting to find out down the road how many business did end up going bankrupt because of the hurricane.
Wow, this was an incredible article. Though, clearly anyone with a business in the are in which Hurricane Sandy struck would have taken a unrecoverable (in many cases) loss to their financial positions. I found this article very eye opening when it explained just really how bad things were for some of the business owners. The example small business given of Linda the Bra Lady in which will now suffer $50,000 per week really makes me wonder is wanting to own my own business some day is too risky. I truly admire these small businesses taking that risk of opening shop and pursing dreams, and am especially reminded by this article. This article makes me wonder what others thoughts are about this incident occurring and how they think they would deal with it?