Hurricanes Helene and Milton have been traumatic in many ways — the loss of lives, homes, history, and in some cases, hope. For those who own or work for small businesses, there is yet another looming loss — that of their livelihoods. This matters for everyone, not just for those who are seeing their American dream imperiled.
Micro-, small-, and medium-sized enterprises (MSMEs), which are firms employing less than 499 employees, account for almost six in 10 U.S. workers and 40% of value added to the U.S. economy. And many don’t stay small. Indeed, recent MSMEs-turned-big account for a significant share (17%) of publicly traded companies valued at $10 billion or more. America’s MSMEs, then, are part of the circulatory system of the economy. If they break down, the whole organism suffers.
Looking at Florida, specifically, the number of MSMEs grew at a robust pace of 11% between 2019 and 2021, outpacing the 6% growth rate of small businesses across the United States during this time. But, according to McKinsey analysis, almost three-fifths of Florida’s MSMEs are in the 34 counties covered by FEMA’s Oct. 16 Hurricane Milton disaster declaration. That’s 1.9 million small businesses, employing 4 million workers and generating more than $500 billion in annual revenues. To the extent that they are devastated, the ripple effects could be felt across the entire state and in the southeast and beyond.
The same is true for North Carolina. The 39 counties that Helene hit, per FEMA’s Oct. 15 disaster declaration, are home to 45% of the state’s small businesses and employ more than a million workers. Hard-hit Buncombe County is home to Asheville — an important population center — and accounts for almost 5% of the state’s revenues.
For the sake of local economies, their employees, and the social fabric of our communities, getting small businesses back on their feet should be a high priority. Federal, state, and local governments are already thinking about this. And many Americans have stepped up, donating their time, money, and expertise to help the hurt. No doubt, as happened during the pandemic, in months to come, individuals will go out of their way to support local firms.
But businesses have a unique and critical role to play. Here’s what they can do.
Do what you do best.
Business leaders know most about business, not disaster relief. So, think about what your business can do, as a business, to help your smaller counterparts recover, particularly those with whom your company works most closely. Many MSMEs, for example, are embedded in large corporate supply chains, and they will need help (financing, people, resource access) to get up and running.
Small businesses in different sectors have different needs — something that business leaders know well because small businesses are their customers and partners. They are in a position to offer precise, tailored, and rapid help. The idea is not to replace needed government aid, but to help get MSMEs off the mat as fast as possible.
Some ways in which large businesses can help small ones:
- Enhance small business revenue streams
- Stretch out payment terms
- Be flexible on contract provisions
- Pay/deliver services on time
Not all large firms have developed this muscle, but we saw some compelling cases of bigger businesses aiding their smaller counterparts during the pandemic. For example, private sector banks in multiple countries became the vehicle for immediate emergency loan support, particularly to customers experiencing liquidity shortfalls. Such efforts were strikingly successful in Switzerland, where private-sector banks helped ensure that by mid-April 2020, the Swiss government had distributed emergency loans to more than 76,000 small businesses — substantially more than other countries in Europe.
Go above and beyond.
The beloved local coffee shop or the food truck that everyone goes to is not on the corporate depth chart. Even so, these institutions might be considered an indirect link in the employee-happiness and customer-wellbeing supply chains. Getting them back to work can help to restore morale and a sense of normalcy.
Some ways in which large businesses can help:
- Provide expert support, such as assistance to get IT systems running
- Make facilities, such as conference rooms or temporary workspace, available
- Facilitate broadband access
- Work with local groups to activate your workforce, to match capabilities with needs
- Use your expertise to help small businesses get the right government attention/deal with agencies.
For example, in the aftermath of the 2010 Haiti earthquake, Digicel Telecommunications funded the reconstruction of a public market in Port-au-Prince that housed small business vendors. It also made data free for a period, which helped both businesses and individuals get back to work.
Help them prepare for the next time(s).
Severe storms and other climate events are not going away — far from it — nor are other disasters like earthquakes. Everyone will be better off if large firms develop a playbook for how to respond rather than designing in haste for each new event.
Here, as in many things, an ounce of prevention is worth a pound of cure. When small firms get support in anticipation of crises, it goes a longer way.
Some ideas large businesses can explore:
- Sharing expertise in disaster preparedness planning
- Assisting small businesses to ensure adequate insurance coverage for disaster-related losses
- Providing anticipatory financial assistance.
For example, in the wake of Hurricane Harvey in 2017, IBM not only offered cloud services to local small businesses, it also took measures to help them build future resilience, including organizing recovery and resiliency planning workshops.
McKinsey Global Institute research has found that when small and large businesses work together, both can see benefits, in the form of greater productivity. Working together can also help smaller firms’ resilience, tied to the same principle of a unified economic fabric. Of course, in the aftermath of a deadly natural disaster, most important is a simple principle: We need each other.
This article originally appeared in Harvard Business Review.