After hurricanes, small businesses struggle to survive

In the aftermath of the devastating one-two punch of Hurricanes Helene and Milton, communities across the Southeast are taking the slow first steps of recovery. For many it begins with assessing the damage to their homes, which might’ve been hit by wind-whipped debris or flooded after the record-level storm surge. Brian Fetting, of Asheville, North Carolina, is among them: as Helene’s powerful winds bent the tall trees outside his home, a snapped branch crashed through his roof “like a missile,” he recalled a last week. 

But that’s just part of the toll Fetting is trying to tally. Fetting is the co-owner of New Origin Brewing, which he opened with his business partner, Dan Juhnke, in 2021. Asheville has more breweries per capita than any other US city. To make their name, Fetting and Juhnke focused on creating a space largely by hand, converting an abandoned riverside building into an operating brewery and bar that only served its drafts in house. Their fingerprints were on everything, from the furniture to the beers they brewed and canned, wrapped in labels they designed.

Helene left little evidence of their efforts. The brewery faced a surge of water and the force of debris carried by the storm, including a train car that smashed into it. The building, tables, taps, equipment, and beer were all a loss, totaling more than $1 million, by Fetting’s estimation. 

“There’s not one wall still standing. I don’t know if there is even one brick still standing,” he said. 

Hurricanes can have far-reaching ramifications on the economy. CoreLogic, an analytics company, estimates that Hurricane Helene alone caused up to $47.5 billion in wind and flood losses, and Milton took aim at an area responsible for nearly 3% of the nation’s GDP, according to Barron’s. But within affected communities, small businesses are key to helping neighborhoods recover, from their roles as employers to the potential to attract residents back to an area. They’re the foundation of the local economies, said Maria Marshall, a professor of agricultural economics at Purdue University, but they’re also uniquely impacted by disasters, often succumbing not just to damage but to the overall strains of a community’s recovery process, which can see large swings in population and economic priorities.

“There really is this interconnectedness,” Marshall said. “The community needs the small businesses to recover, but it’s also vice versa: you need customers and suppliers.”

Numerous studies have found that disasters can be a death blow to businesses, but small businesses in particular struggle to reopen their doors. While the Small Business Administration says one in four businesses never reopens after a disaster, FEMA says that figure is significantly higher for small businesses, with 43% closing for good. 

Marshall, who spent years studying the factors that contributed to small-business resiliency after Hurricane Katrina, said the statistics differ depending on the disaster and time frame you are looking at. Right now, for example, a lot of businesses affected by Helene and Milton remain closed while water and electricity are restored. Marshall found that in the decade after Katrina, 25% of small businesses in southern Mississippi shuttered.

For business owners like Fetting, the challenges go beyond infrastructure. His brewery is not generating any revenue, but bills are still coming, from credit-card payments to recurring charges for things like his point-of-sale platform. Even businesses that weren’t physically damaged have to cope with the gap between costs and earnings. And until public services and roads are restored, operations remain difficult to impossible in some regions. When or if businesses do reopen, they’re still likely to see a drop-off in business while locals remain displaced and tourists pause their travel plans.

The wildfires that decimated parts of Maui last year are an excellent example, Francisco Sanchez Jr., of the Small Business Administration’s Office of Disaster Recovery and Resilience, explained in a recent webinar. “There were businesses, obviously, that were physically impacted, but you see a reduction in spending, a reduction in economic growth, and so you may be a business that has reduced revenue,” Sanchez said. One year after the fires, a local business owner in Lahaina, the hardest-hit town, said that of the 102 small businesses destroyed, just three or four had reopened.

The Small Business Administration is one of the federal government’s deepest pockets of disaster assistance, offering businesses up to $500,000 in low-interest lows, but it announced on October 15 that the recent storms had depleted its budget. While the administration is still overseeing aid applications for 173 disasters, the agency needs Congress to allocate additional funding. 

So far, the SBA has received about 50,000 applications for relief from Helene and Milton alone, a number that is likely to increase. Marshall stressed that many small-business owners facing disaster damage are likely dealing with it at home, too, which can put a further strain on their finances. “If it’s just the business that’s been hit, they can rely on household resources, but when it’s both, what resources do you have to push back and forth?”

The two storms dealt multiple blows to Linda Wicker’s family: the loss of her son’s home and that of Roy’s Restaurant, which the family had owned and operated in Steinhatchee, Florida, for two decades. This was not their first experience weathering a tropical storm — they had undergone an extensive remodel following damage from Hurricane Idalia last summer — but Helene left them with almost nothing, the storm “a lot different, a lot more powerful, a lot stronger” than what they’d seen before.

“Typically with storms in the past, you’ll find bits and pieces of your restaurant scattered all around the parking lot, along the road, at the neighbors,” Wicker said. “This time we have not located any interior walls. We seated 200 in the restaurant — have not found one table.”

Still, she’s determined to rebuild. The community needs them, she said, noting that the local grocery store and other restaurants in the area were also lost. Having been through this before, she’s already hired an architect and talked to contractors. In the meantime, her family’s getting a food trailer to serve meals out of their parking lot, which will allow them to bring some staff back on and start making money again.

Fetting is less sure about the future of his business. He doesn’t think they’ll rebuild in the same spot, and he’s unsure if they’ll have the funds to start from scratch unless he takes a drastic step, like selling his house. For now, both Fetting and Wicker have opened GoFundMe pages to help kickstart their recoveries and pay their employees, joining all types of other businesses populating the self-fundraising site’s hundreds-of-pages-long hurricane relief section. 

Marshall said it’s important to understand that behind the figures of small businesses that “survived” or “failed” following disasters, there’s a lot of gray area.

“I usually tend to make a distinction between recovery and survival,” she said. “A business might reopen, but they’re actually worse off than they were before that recovery, before the disaster. Yeah, they’re operating, but they may still be in survival mode.”

Colleen Hagerty is a journalist in California.