Adapt or die is the mantra in evolution, and so it is in the evolution of the small business communities in regions hardest hit by Hurricanes Katrina and Rita. Katrina slammed the New Orleans Region on August 29, 2005, followed less than a month later by Hurricane Rita, which made landfall on September 24, 2005.
The storms wiped out 18,000 businesses and damaged or economically impacted more than 81,000 small businesses along the Gulf coast. The vast majority of those small businesses still face many challenges in adapting to the new economy.
According to the New Orleans Index, 87 percent of pre-storm populations, 86 percent of jobs, 76 percent of all previous public and private school students, and approximately 81 percent of flights at Louis Armstrong New Orleans International Airport have returned to the region as a whole. (The New Orleans Index is a joint collaboration between the Greater New Orleans Community Data Center and the Brookings Institution in order to bring an even better, more tailored assessment of recovery of the New Orleans region.)
“It’s a mixed economic forecast for small businesses,” said Carmen Sunda, Director of the Louisiana Small Business Development Center-Greater New Orleans Region (LSBDC-GNOR). “Those businesses that adapted quickly and reinvented themselves are prospering even expanding. But the businesses who have not adapted to a smaller labor force, a smaller customer base, and less tourism are really hurting.”
“Hurricane Rita has been a turning point in the economy of Southwest Louisiana,” said Donna Little, Director for LSBDC at McNeese University, which serves Cameron and Vernon Parish which were hit hard by Rita. “Some small companies are barely keeping their heads above water, still suffering from either the debt they incurred to survive after Rita or from the change in the market. LSBDC consultants have been working with small business owners to help them work more efficiently, retool for the changing business climate, and upgrade their technology base so they can work smarter instead of harder.”
Since Katrina and Rita, the LSBDC network provided business recovery assistance to 5600 clients, offered 513 diaster recovery training events to 7717 attendees, and disseminated disaster recovery information to 4395 individuals. The Louisiana Small Business Development Center is a statewide network of nine service centers, that provide free confidential business consulting, business training, and business information resources to small businesses and entrepreneurs.
“In 2007, 72 percent of our clients were existing businesses—many looking for ways to reinvent themselves in order to survive,” said Sunda. “That’s a 15 to 17 percent increase from pre-Katrina numbers. In the last couple of months during the 6-week period we were taking applications for the Louisiana Recovery Authority’s Loan and Grant program, more than 200 business owners applied for 25 million dollars in disaster recovery loans. A large percentage of those applying for the zero-interest loans were first-time applicants, which indicates the continuing need for assistance.”
But some business owners have found a way to turn adversity into opportunity, like Tina Emenes, whose company Cajun Creations in Kenner is actually doing better now than before Katrina. Emenes came to the LSBDC-Greater New Orleans Region for help to reach new markets after 80 percent of her local customer base was wiped out by Katrina. LSBDC helped her reach national and international markets, and her sales jumped 80 percent compared to pre-Katrina sales figures. Tina’s Cajun Creations began in 1987 as a small cookbook shop called “Books for Cooks” at the Riverwalk in New Orleans. It had mushroomed into a company that sells multiple product lines of spices and gourmet food mixes, both nationally and internationally. Founder Tina Emenes credits much of her success to the LSBDC.
“I first heard about the LSBDC standing in line at the Small Business Administration Disaster Center on Airline Drive. I knew my business was in trouble after Hurricane Katrina,” said Tina.
Tina’s Cajun Creations, based in Kenner, had sold most of her products to small retailers and tourist attractions in the French Quarter. Eighty percent of her sales depended on New Orleans tourism, and suddenly that market was wiped out after Katrina. Tina had lost most of her sales and most of her employees. She turned to the LBSDC for help. The LBSDC taught Tina how to diversify and find a new customer base outside of New Orleans. The LBSDC helped Tina revamp her marketing strategy and business model and obtain the financing necessary to redesign the packaging for her product lines and to creative materials to reach national and international markets. Consultants helped Tina overhaul her website and position her company for e-commerce.
Since LSBDC Greater New Orleans Region is collaboration among three universities and an economic development agency: SUNO, UNO, Loyola and the South Louisiana Economic Council, LSBDC consultants were able to connect Tina to resources offered by the universities. She received marketing interns to help create a customer database and marketing expertise and research from faculty members.
Today, Tina’ company is stronger than ever before. Tina now sells her products on HSN (Home Shopping Network), in Dillard’s Department Stores, in Whole Foods, and in Ross Department Stores. She has even signed a contract to sell her wares in the United Kingdom.
“LSBDC has been a lifesaver. I couldn’t have done this on my own. As a small business, I didn’t have the capital to expand or hire the expertise needed to take my business to the next level. I am so grateful to the LSBDC for everything they’ve done for me,” said Emenes.
Other entrepreneurs, like Pamela Pipes, are still looking for a full recovery. Pamela literally became the voice of Katrina survivors with her “Hurricane Katrina Self-Guided Tour” CD, that was recognized as a finalist for the prestigious 2008 Audie award. Pamela’s business, New Orleans A La Carde, marketed tourist attractions in hotel lobbies. When Katrina destroyed her business, Sunda suggested to Pipes she could create a business doing disaster tours of the beloved city. Pipes created a self-guided disaster CD which not only takes tourists to the site of the destructions but points out lessons from the storm.
Samay Son is a commercial fisherman who was able to reopen his fishing business after Hurricane Katrina.
Son immigrated to the United States 12 years ago in search of the American Dream of an unlimited opportunity and prosperity. He found work as a deckhand on a fishing boat. Ten years later with hard work and determination, Samay Son started his own fishing business. In 2005, Hurricane Katrina deveastated the fishing industry in Buras. Son lost almost everything. His home and his shrimp boat were destroyed. He turned to the LSBDC-Greater New Orleans Region. Vietnamese consultant, Sandy Nguyen, was able to help Son apply for loans and grants to reopen his business; something that would have been impossible for him to do so on his own because of his limited ability to speak English.
With assistance from LSBD –Greater New Orleans Region, Son was approved for a $60,000 SEEDCO loan and a $20,000 LRA grant. Son was then able to purchase another shrimp boat to replace the one totaled in Katrina , reopened his fishing business , created 2 new jobs and can now begin again to work on building her personal American Dream success.