A year after Superstorm Sandy, a new survey of small business owners and managers in the metropolitan New York City area found that nearly 30 percent of respondents affected by the storm would be forced to make staffing cuts in the event of another major storm.
Additionally, 52 percent of respondents whose businesses were significantly impacted by Sandy answered that they were not financially prepared for another disaster.
The survey was published Wednesday by New York-based accounting and financial services firm Anchin, Block & Anchin. It polled 266 small business owners/managers from a population of owners/managers in Metropolitan New York City, New Jersey, and Connecticut. The survey contacted owners/managers of companies with up to 500 employees.
The findings suggest many local business owners lack financial planning and/or resources to handle another natural disaster.
Despite the large amounts of Federal and state aid that followed the storm, of the small businesses who reported being harmed by Sandy, only 20 percent took advantage of tax credits or incentives to recover, according to the survey.
The storm also drove an increase in commercial rent costs, as 26 percent of respondents affected by the storm saw an increase in commercial rents. For those who experienced no impact from the storm, only 5 percent saw their commercial rent costs increase. Of those businesses affected by the storm, 35 percent saw insurance premiums increase, versus 21 percent of those who were not affected.
“Business owners have invested in fixing their infrastructure and in some cases provided for off-site back-up so they can keep working in the event of another disruption,” said Greg Wank, the Anchin, Block & Anchin partner who headed the study and chairs the firm’s Food & Beverage Practice Group.
“However, it’s clear that not enough owners have built enough in cash reserves for disaster/backup funding or have arranged for contingency financing,” he said.
He also noted that only 3 percent of respondents said they accessed additional financing since the storm. “Another event like this could create a scramble for capital, which will reward businesses that have already secured bank credit lines and built cash reserves,” he said. “Businesses need to prepare now.”
The survey found only 15 percent of total respondents invested in technology and 10 percent invested in infrastructure. Among respondents negatively impacted by the storm, the numbers increased to only 19.1 percent for improved technology, and an identical 19.1 percent for improved infrastructure. In the survey, 45.2 percent of respondents said they had experienced some loss as a result of the storm.
Anchin, Block & Anchin is a New York-based accounting and financial services firm that serves privately-held businesses and high net worth individuals with a wide range of business advisory services.
Source: Anchin, Block & Anchin