Welcome back to the professional student! Last week, I shared my experience living through Tropical Storm Helene in Western North Carolina and offered some insights into small business recovery from a community and economic development perspective.
When disaster strikes, small business owners have limited options:
Rely on insurance (if you have it) to cover some losses.
Seek small business recovery grants.
Dip into personal savings.
Borrow money from family or friends.
Fundraise
Take out a loan.
Close up shop.
After speaking with several small business owners, I’ve noticed a common misconception: Many believe that state or federal aid will step in to save them at the same level as public entities. That simply isn’t the case. Here’s why:
As a small business owner, you are a private entity. Being a private entity means assuming 100% of the risk of operating your business.
While state and federal governments may allocate funds for small business recovery, those funds are limited and not guaranteed. Relying on them as your primary safety net is a mistake.
Risk Mitigation: Your Responsibility
Owning a business isn’t just about selling a product or service—it’s about managing risk to ensure long-term resilience.
Let me be crystal clear: As a small business owner, YOU assume 100% of the risk. Say it out loud. Repeat it until it sticks—before you even consider opening a business.
So, what is risk mitigation? In simple terms, it’s the process of reducing threats to your business and safeguarding its future. Effective risk mitigation means putting controls in place to minimize the impact of unforeseen events.
Your goal should be to reduce that 100% risk as much as possible. For example, a restaurant owner minimizes legal risk by adding a disclaimer to their menu about the dangers of consuming raw or undercooked food. If a customer insists on eating a nearly raw steak and gets sick, that disclaimer helps protect the business. Another key risk mitigation strategy is handling and storing perishable food properly to prevent foodborne illnesses. That is risk mitigation—taking proactive steps to prevent disaster.
I recently spoke with a business owner who lost critical equipment due to flooding. Desperate for solutions, they asked for help. My first question: “Have you filed an insurance claim?”
To my shock, they had no commercial insurance.
After digging deeper, I discovered North Carolina doesn’t require all business owners to carry commercial insurance. While that may be legal, it’s also a massive risk.
Would you drive a car without insurance? Some people might, but the smart answer is no. The same applies to running a business.
If you cannot afford to protect yourself, your employees, and your assets with a commercial insurance policy, you have no business opening a business. Say it again:
👉 I HAVE NO BUSINESS OPENING A BUSINESS IF I CAN’T PAY FOR A COMMERCIAL INSURANCE POLICY TO PROTECT MYSELF, MY EMPLOYEES, AND MY ASSETS.
It’s that simple. Risk management isn’t optional—it’s essential.
Insurance is a basic first line of defense. Stay tuned for part III when I dive even deeper into steps business owners can take to mitigate risk!
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As a resident of Western North Carolina (WNC) working in community and economic development, I have come to know and understand the many unique challenges that both residents and small businesses face, such as the land and unique mountainous terrain, the price and lack of affordable housing, the lack of childcare and affordable childcare, and the cost of living to name a few. I acknowledge that many of these challenges are not unique to WNC and can be universally applied to the country.
So, let me try to paint you a picture of WNC. Most of it is rural, with small populations in each county and municipality that heavily rely on small businesses and tourism to support local economies.
Regardless of the size of some communities, 45% of North Carolina’s GDP comes from Western North Carolina (OSBM Helene Damage Assessment), and 99.6% of North Carolina’s GDP comes from small business owners.
The months of September and October are classified as “peak leaf season,” as many tourists flock to the area to witness the spectacular seasonal change of the trees that fills mountains and hillsides with bright colors of yellow, orange, and red. These tourists typically provide small business owners with about 30% of their annual revenue, enough to sustain them during the slower winter months until tourism picks up again during the spring. There is much more relevance to this, and I’ll get into it further.
The median income is below the state’s median income of $68,610, and we have a higher population of seniors than the state, requiring a high level of care. For more in-depth details, please feel free to explore this county profile map put together by the NC Rural Center: https://www.ncruralcenter.org/county-data/
Thinking back to late September of 2024, I don’t think anyone could have predicted the magnitude or the impact that Tropical Storm (TS) Helene would have in our region.
I was extremely fortunate, thankful, and grateful to have escaped the storm with no damage other than food loss. Thinking back to that day, I recall being home on Friday, September 27, and the power went out at about 8:00 am. Many parts of Western North Carolina had already received 6-10 inches of rain the day before the implications of TS Helene, which set the stage for the disastrous events that followed. The ground became over-saturated with water from a different storm system the day before, and the surrounding bodies of water had already risen or flooded.
I was calm when the power went out. I thought I was prepared and ready. I was not. No one was. No amount of warning could have prepared the citizens of the disaster-declared counties for what was to come. Shortly after the power went out, all cell phone communication was lost, and there was no internet access. I was in the dark, literally and figuratively. Having no idea what was happening and inability to find out sent me into panic mode. I made preparations to leave until it was suitable to come back, which ended up being almost 3 weeks later when the electricity was restored.
I remember waking up early on Saturday, loading my car, and heading out into the unknown. A typical 3-hour drive took almost 6 hours, and I had to drive well over 120 miles before I could get a glimmer of cell phone reception. Every small town that I drove through was also without electricity. Homes were ravaged and destroyed, and I witnessed the entire River Arts District underwater while driving out of Asheville. I saw homes and vehicles with trees lying across them. I saw a whole section of the interstate closed from a mudslide in Black Mountain, which caused a reroute from 70 to 26 for myself and many others trying to leave the city. I saw people, blanked-faced, wandering the streets in a state of panic and confusion, trying to figure out where to go or what to do. It was the equivalent of the zombie apocalypse minus the zombies. I don’t know how else to explain it.
I watched the chaos unfold from afar and kept my neighbors and friends up-to-date as much as I could via text messages who had chosen to stay in their homes but did not have internet access. Leaving my home left me with a feeling of guilt, but I soon realized that I was one less person in the area to take away from the resources that were desperately needed by those who had lost everything.
WNC communities and small businesses were and are still recovering from TS Fred, in addition to small businesses recovering from the COVID-19 global pandemic before TS Helene hit. Most of Fred’s public recovery efforts have been wrapped into the scope of TS Helene’s recovery efforts. Public recovery is a challenge but not the same as private business recovery.
Private business recovery differs significantly from public recovery because business owners assume 100% of the risk. There are few options for small business owners (SBOs) outside of loans or grants (if they can find any). Many SBOs are still paying off loans that supported them throughout the pandemic and cannot borrow more money regardless of the low interest rates offered by the Small Business Administration.
So, what was the first problem? As I said before, small businesses earn approximately 30% of their annual revenue during September and October, peak leaf season. The revenue earned during peak leaf season carries SBOs to spring when tourism picks up again. Just because communities were located in disaster-declared counties does not equate to them being closed for business. They had the capacity to handle economic activities derived from tourism.
I understand the implications that were caused to all of the roads in Western North Carolina and the need for roadways to be free for emergency responders and trucks bringing in aid. Still, at the same time, small, rural, distressed communities that were not impacted or minimally impacted that could host tourists were unintentionally crippled through the actions of the former Governor. The intentions were good, but the delivery was terrible and should have been much more precise regarding what was closed to tourism and who was open.
So, let’s say a business owner filed an insurance claim, and like most insurance claims, there was a partial or complete denial. Now, the business owner turns to the SBA, and there is no money. What are they supposed to do? The harsh reality is that many had to close their shops, pack up, and leave the state. Their employees and the owners are out of work, the local economy is affected, and the entirety of North Carolina is affected.
Thanks for stopping by The Professional Student! Part 2 will follow shortly, but please let me know your thoughts, especially if you’re a local resident of Western North Carolina.
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