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How Hurricanes Affect Businesses
By the RestorationSOS Educational Staff
Much is made every year about hurricanes and their impact on a given area, the number of residents displaced, how many homes are destroyed, etc. Yet little is made on exactly how these events affect business, industry, and commerce in a given area ravaged by the latest named storm of the season.
In many cases, the damage to area merchants may be felt for two or three years following a given storm. It's never as easy as just wiping up the water and opening for business on the very next day. The "hurricane effect" is something that most people still do not quite understand or grasp the significance of.
How Some Businesses May Benefit
While some companies, namely those in the service industries, may receive a boost in their business as the result of a hurricane, for most merchants, these storms only represent an interruption in their business that may be felt for a period of months following the storm.
In many cases, it is the profit bump experienced by these industries that lures an entrepreneur to a given location. If you're willing to put up with the headaches caused by hurricanes and tropical storms, such a move might prove to be a lucrative one. Many of these companies in hurricane-prone areas make most of their yearly income during the five-and-a-half month hurricane season every year between June and November.
How Some Businesses Lose Out or Fail
Other businesses may not be so fortunate. Hurricanes causing significant damage may result in a certain businesses having to close their doors for repairs for a period of days or even weeks, resulting in a revenue loss that may prove all but impossible to recover from. Not many businesses can afford to shutter themselves for an extended period and expect to continue as a business for very long.
Hurricanes often permanently impact certain industries and also have the potential of altering the marketplace. In some cases engineering code changes will be made regarding certain constructs, raising the price of construction and lessening demand for them. Companies specializing in those types of structures may find less demand for their product than what was there in the past. Obviously, this affects the company's bottom line.
Companies will also be unable to avoid reporting cost relating to hurricane damage when reporting their financial status, and insurance costs may also skyrocket as a result of the sheer number of claims being processed in the aftermath of a particularly destructive storm.
The damage caused by hurricanes and tropical storms is far reaching, and not something that will be rectified in a short amount of time. Business owners thinking about opening or expanding into storm-prone areas should stop to consider all of the possible ramifications of that decision before committing personnel and finances to such a project.