I never imagined I would have to go through a second natural disaster in my lifetime. After the events of the past week, it appears to be the case. Almost 20 years ago, I first wrote about my experience with Hurricane Andrew and the lessons learned. As I re-read the article below, it occurred to me that these lessons might be just as applicable today as they were then. I hope that each of you learns from my experience.
Ten years ago, Hurricane Andrew assaulted South Florida. I lived and owned a business in the city of Homestead, which was hardest hit by the storm. Since then, I’ve had considerable time to ponder the lessons I learned before, during, and after the Hurricane. From the perspective of a small business owner, there are five identifiable lessons that will stay with me for a lifetime.
Hurricane Andrew was a Category 5 monster with winds exceeding 145 mph. It was the most costly weather disaster in U.S. history, inflicting over $25 billion in damages in South Florida. The storm killed 15 people in Miami-Dade County and was indirectly responsible for at least 25 other deaths. Hurricane Andrew destroyed over 25,000 homes (mine included) and damaged over 100,000 additional houses. At least 180,000 people were temporarily left homeless.
After the Hurricane, we had 23,000 soldiers and 6,000 members of the National Guard move into our “neighborhood”. Helicopters flew in formation. Convoys thundered through residential streets and over massive amounts of debris. There were military checkpoints at what used to be busy traffic intersections. Schools were destroyed. Common landmarks such as trees, buildings, and signs were gone. I got lost in my own sub-division. It was a scene to which I can’t even begin to draw comparisons.
Within days of the storm, we decided to rebuild our home and our business in their original locations. We knew both efforts would be huge undertakings, but we had no idea just how challenging the experience would be.
For six months, we operated our travel agency out of a trailer in a gravel parking lot behind the previous site of our building. The Hurricane relocated most of our files, airline tickets, and small office equipment somewhere west of us in the Everglades National Park. We worked with temporary phones, makeshift desks, and a port-a-let. Getting to work each day was a minor miracle. Making it through each day required extraordinary patience and resilience.
By the time we were able to move back into our new office and resume some level of normalcy, we had learned a number of rather simple business lessons we would not forget.
Lesson #1. Carefully choose your business partners. When I speak to individuals starting new businesses I talk about the importance of selecting the right professionals for their respective business start-ups. We discuss the importance of finding professionals such as an attorney, an accountant, and banker who understands your business, and with whom you have a good rapport or chemistry.
In our case, we were very fortunate after the hurricane particularly in terms of our bank and our insurance company. Both partners worked very hard to help us through the painful recovery stage of the storm and then the rebuilding efforts. Their interests were in us, not only as business clients, but as people and neighbors as well.
Our landlord was a different story. Unfortunately, he decided to capitalize on this disaster as a business opportunity. While other business vendors and suppliers went to great lengths to work with us as “partners” in rebuilding, this individual was difficult to work with taking advantage of us and his own insurance company at the same time. Lesson learned.
Lesson #2. The importance of customer loyalty. Prior to the hurricane, I attended numerous customer service seminars focused on the importance of customer satisfaction for small businesses. While it made sense to me, I had never really tested the theory until after the storm.
We found out many of our clients were not just satisfied with our services, they were also extremely loyal to our business. How did we know this? Due to the circumstances, our customers had to go to great lengths to use our services. For a while, we didn’t have dependable phone service (or even power). Instead, our customers had to literally come and find our office trailer. There was no parking per se. No comfortable chairs or waiting area. Minimal air conditioning. It was an ordeal to come to our office for any of our customers.
And yet they came. Day after day more and more old customers showed up. Some just came by to see if we were okay. Some were planning their exodus from South Florida. Others had insurance checks and were planning getaway vacations. Our business clients slowly began to travel again as well.
I am convinced that we did not see many of our previously satisfied customers. A satisfied customer will switch brands very easily if the price is right or the switching costs are minimal. No, these were loyal customers that came back to us after the storm. They felt an emotional connection to our agency and employees that made switching agencies almost impossible. That is a lesson I won’t forget.
Lesson #3. The importance of employee loyalty. I studied employee motivation and leadership for many years prior to Hurricane Andrew. I prided myself on being an effective leader. Many of our employees had been with us for a considerable amount of time. They seemed to be satisfied with their employment. They seemed to be loyal to their employers. But that loyalty had never really been tested.
After the hurricane, our immediate concerns were with the safety and well being of our employees. Many of them experienced the same level of damage to their homes as we had. A number of them had to relocate to hotels, rental homes, or other family residences for months. Some had better insurance than others. Some faced significant financial hardship as a result of the storm. Like ourselves, each of them was trying to figure out how such a bad thing could happen to such good people.
The miracle was that within almost a week of the disaster, each of our employees was prepared to return to work. Not because they had to. But because they wanted to. At that point in time, our office was as close to a home as they had, and we were all family. This was not easy work. For a time every booking was done manually without computers. There was a very high level of stress due to the situation and the clients we were dealing with.
Had it not been for these loyal employees we would have never been able to rebuild the business. Many of the items we lost during and after the hurricane were replaceable. These individuals were not. They were one of a kind.
Loyalty is like beauty; it’s very hard to describe, but you know it when you see it.
Lesson #4. Don’t ever under-insure your business (or home). The aftermath of Hurricane Andrew was a classic learning experience in the field of Insurance. For years I had taken our business insurance coverage for granted. Every year our agent would pay us a visit and present us with our insurance coverage (bill). I can’t say that I truly understood what was covered and what wasn’t. Over the years I had processed a handful of claims and had never had reason to question what we had or didn’t have in our coverage.
This particular year prior to the hurricane we met with our agent as usual. We were looking for ways to cut costs and asked that he take a little known coverage called Business Interruption insurance, off our bill. That $150 savings could be applied somewhere else in the business we thought. Our agent politely replied that if we did not want that coverage we would have to find another insurance agent. He said he could not sell us a policy without that specific coverage in good conscience. Rather than switch insurance agents, we buckled and took the policy as presented. Thank goodness.
We later learned that Business Interruption insurance protects the owner’s earnings from the business in case the operation of the business is interrupted due to storm, disaster, war, etc. This coverage provided my family with income for one year as we rebuilt our business back to where it had been the business day prior to the storm. In addition, we were fortunate that we had provided ourselves with excellent contents insurance allowing us to replace all of the equipment, furnishings, etc. in our office. Needless to say that I am now a proponent of Business Interruption insurance.
Lesson #5. At the end of the game, all the pieces go back in the box. If there is one lesson that has had the greatest impact on me since Hurricane Andrew it is this one. Leading up to the day of impact, I had worked very hard for 10 years to build a portfolio of personal and business assets. In less than 24 hours, the majority of those tangible assets had been lost. Sure, we were able to recover certain items that had not been destroyed by the storm or ruined by the days of rain that followed. Yes, insurance allowed us to rebuild and start over. But the thought stayed with me that the tokens we work so hard to earn could be lost just as abruptly, and in our case due to no fault of our own. Even if we make it to a ripe old age, much of what we have collected over our lifetime gets redistributed anyway.
What the storm couldn’t take away are those things that I value most today: family, friends, and a lifetime of great memories.
Small Business does Matter!