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<br /> <br />Figure 3.2 This hog <br />farm was one of the <br />estimated 600 <br />/iwstock operations <br />that was dismpted by <br />the flood waters from <br />Hurricane Floyd. <br /> <br />40 <br /> <br /> <br />IMPLICATIONS OF HURRICANE FLOYD FOR <br />BUSINESS RISK REDUCTION PLANNING <br /> <br />There is a growing recognition among state and local policy makers that disasters can have profound <br />economic consequences for communities, Furthennore, it is important to develop pre-disaster strategies for <br />reducing the impacts of future disasters on local businesses. In tbis context, the experience of Hurricane <br />Hoyd bas important implicalions for the development of long-teml, community-based business risk reduc- <br />tion strategies for 1I'0rtb Carolina, as discussed below. <br /> <br />TIle Small Business sector must receive priority in a business risk reduction initiative. <br /> <br />Tbe small business sector was c1C'Mly the most impacted by Hurricane Floyd, and this sector is hming <br />difficulty in resuming nonnal operations, Mtile being the premiere job creation force in the state, the <br />fundamental characteristics of small business make it tbe least resilient to the consequences of disaster <br />induced business disruptions, <br /> <br />According to a report of the Institute for Business and lIome Safety, of all businesses that close down after a <br />disaster, more tban 43 percent never reopen, and an additional 29 percent close down permanently within <br />l\\'Q years.5 <br /> <br />A business risk reduction strategy must address the unique problems and Hllnerabilities of small business, <br />For example, stf'Jtegies must take into considemtion the pre-disaster financial condition of small businesses, <br />and the limited capacity to sustain losses. In tbis context, small business recovery will be dependent upon <br />successfully absorbing uninsured losses, restructuring debt, re-capitalizing and properly assessing the post- <br />disaster markelplace for their products and services, <br /> <br />Finally, it is important for economic development organizations at the state and local level to establish new <br />capital sources that will target small businesses, Among the recommendations of the Economic Development <br />Administmtion following Hurricane Floyd: crealion of a small business consonium, encompassing both loans <br />