How will Hurricane Sandy affect small biz?

By Michael Banner - Jan 4, 2013     

How will small biz be affected by Hurricane Sandy?
Michael Banner


We hear political campaigns, from Presidential all the way down to the local level, telling us how small businesses are the engine that stokes the fires of the economy and that as many of 2/3rds of all jobs are created by

small biz. Considering this, how will Super Storm Sandy affect small businesses and therefore the US economy? Further, if you have a small biz, what can you do to mitigate your potential for losses? 

Unfortunately, most small biz owners are undercapitalized and more so now due to the devastating effects of this recession and ongoing economic malaise.   So, it should be apparent in the coming days that the effects of Sandy will most definitely, impact the bottom lines of small business owners and therefore directly affect the US economy.  Here are a few ways this has happened.


Disruption to business sales

Sales disruptions are already obvious to most businesses selling products & services nationally (i.e. online) or to target markets located in the East Coast.  About 1/4 of the US population was directly or indirectly affected by the Hurricane Sandy.  Most of those folks are worried about their safety or the safety of their family and their property.  Because of this, the storm immediately changed the prioritization their purchases, whether it is a new smartphone, or software program, a new car, etc.  Many businesses have seen this just in the last two to three days.  At, we’ve had many customers report slowdowns in sales.


Besides the psychological or sociological impact, there is the obvious physical impact of the storm manifested in many ways:  flooded streets and damaged business property, making it impossible for small biz customers to purchase their products or services; the salesman whose travel has been interrupted by the more than 16,000 flight cancellations; or website servers of many businesses, including well known news websites such as the Huffington Post & Gawker, which went down because of electrical disruption, direct storm damage, connection problems, or other issues.  Many banks, based in the East are still experiencing website disruptions.


All of these factors disrupt small biz sales.


Of course, with larger businesses, which have the resources to mirror servers in multiple locations or have multiple physical locations, the disruption is minimal.  Small biz owners lack these resources and therefore feel the effects much more.


Disruption to execution

Disruptions are not only felt in the purchasing side of the equation, but also in the execution of product or service delivery to small biz customers.  The storm may have damaged inventory as well as customer information due to server or physical file damage. FedEx reports expected delays throughout the East Coast.   Staff may be unable to get to their work, or maybe attending to their own family or assets affected by the storm.


Again, if the business is larger, many of these disruptions may be mitigated by multiple locations or additional resources.  Small biz owners with one location will certainly see the most disruption.

Future Solutions?

So what can small biz owners do to limit the disruptions to their business and minimize their losses?  Here are five actions a small biz owner should consider taking:


1.  Buy additional insurance – Insurance can be purchased for many of the areas affected by something as devastating as Hurricane Sandy.  Besides the obvious of insuring the physical assets (i.e. building, & personal property), which most businesses already do, small biz owners can also buy business interruption insurance.  This covers the loss of profits, increased expenses, the cost of a temporary location, and more.  See your business insurance agent for more details and availability.  


2.  Go to the cloud – Previous to “the cloud”, businesses’ only options were to mirror their servers in multiple locations.  This was (still is) very expensive.  The cost of keeping your business servers on the cloud has come down dramatically over the last couple of years.  And now it is actually possible to consider this as an economic alternative to having servers physically housed in your office or a hosting company down the street.  The benefit of this is simple; if one server goes down, others immediately take its place.  Gone are the potential problems of direct damage to the company’s server(s), especially during exceptional situations like a storm.


3.  Increase liquidity (Cash on hand or Lines of credit) – There is no substitute for having cash on hand when your small biz needs it.  But if you don’t have a reserve fund or cash on hand, what can you do?  Consider two options:  Bank line of credit or merchant financing.

Line of Credit – Banks are definitely tight when it comes to giving out loans to small biz, but if you have any sort of a long standing relationship with your bank, see what they would be willing to do.  A line of credit is a pre-approved source of cash, if your business needs it. 

Merchant financing – American Express has recently been pushing a merchant financing program where they will loan a percentage of last 12 months Amex charges for as little as 6%.  Best yet, if you have history, they will loan this up front and with no credit references.  For Amex, call 1-855-298-1209 for more info.  Of course, you have to have credit card billing history, but for those who do, this is one more source of capital that cannot be overlooked.


4.  Set up partnerships – Consider partnering with regional complimentary business owners in other areas.  Besides increasing your sales sources, your partners may be able to directly help in logistical areas, affected by the unforeseen, such as a big storm.  For instance, your partner’s store/office could be a delivery point for payments or your product shipments.


5.  Limit loss of sales – The key here is to not be too dependent on one or more “big” customers, whose business, and therefore your business, could be affected by something as big as hurricane.  This is good advice all the time, as anything that could cause your biggest customer to move his business elsewhere, would directly affect your small biz.  So, just as you might diversify your investments, you should consider diversifying and expanding your customer base.

How has Sandy affected your business?  How will you mitigate your losses in the future?

About Michael Banner
  CEO & Founder of, created over twenty years ago to help small business owners simplify the process of starting & managing their small businesses. now serves over 10,000 businesses per year with various filing and subscription services; in addition to the 1000's of daily visitors to, accessing free services, help pages, & educational videos & webinars.