DESPITE BACK-TO-BACK BLIZZARDS this past February, Erin Wallace, the owner of the Devil’s Den and Old Eagle Tavern, bars in and around Philadelphia, dug out both locations and opened up shop. Deliveries were another matter. “I was getting phone calls from distributors; everyone was off,” says Wallace, who had to add a second delivery day on Saturday, but managed eventually to receive her orders.
Dealing with the vagaries of weather is a perennial headache for businesses, of course, but this winter was particularly harsh. Not only did some businesses lose sales resulting from reduced foot-traffic, others watched their supply chains slow or shut off, their pipes burst or roofs collapse.
As political debate over the impact of global warming continues, some climatologists and climate-minded economists are analyzing what the long-term impact on businesses could be. “It’s well known that higher temperatures can trigger changes in rainfall and snowfall,” says Fran Sussman, a senior economist who focuses on the economics of climate change at consultancy ICF International. This doesn’t necessarily mean that more or less rain and snow will fall in the future, she says. Rather, higher temperatures are consistent with more variability in the climate. In turn, changes in the climate could also lead to increased severity of extreme events like hurricanes and earthquakes, Sussman says.
While not every small business needs to be concerned about the effects climate change, it can’t hurt to have a backup plan. Here’s how to prepare your business for a really rainy day:
Identify risk factors
Find out what your company needs to be in business. For some it’s a physical location and inventory to fill it, for others a company’s staff is vital for operations. Still another company may rely on a hearty supply of mangos, bananas and strawberries as well as operable blenders. After identifying which elements are necessary to the daily operation of your business, think about what events or other outside influences could jolt your company’s normal operations, says Craig Fugate, the administrator of the Federal Emergency Management Agency (FEMA). Would flood conditions put your business on pause? How about sky-high energy prices? Might a surge in gas prices slow down shipments? Think also about necessary supply chains, says Fugate. “Even if I don’t control them,” he says. “If my supply chain fails, I can’t do my job.”
Devise a backup strategy
Then devise a backup plan. If you’re expecting future shocks arising from inclement weather or other disasters — natural or not — consider locking in longer-term contracts and agreements now, says Sussman. If your business needs a consistent supply of energy to stay open — and you work in an area that’s susceptible to storms — secure a backup generator. Will you lose your security system when the power goes out? Also, set up a plan in which employees can work from home should transit become difficult. “Basically, think about climate change the same way you would think about what affects profits and your supply of products,” she says. “This is just one more factor to consider.”