Houston’s Small Businesses Rebounded Quickly After Harvey, But The Hardest-Hit Are Still Rebuilding

A report shows small business revenue was back to normal a week after Harvey hit Houston.

By Florian MartinSeptember 28, 2017 9:30 am, , , ,

From Houston Public Media:

Harvey’s impact can be felt across Greater Houston – it flooded thousands of homes.

But it also damaged and destroyed businesses, and among the hardest hit were small businesses, which make up the vast majority of Houston companies.

One of them is NightLight Pediatric Urgent Care in Humble, where workers have stripped the office to nothing but its stone walls, glass windows and metal frames.

When Harvey hit, the strip mall where the building is located quickly turned into a lake.

“We have a camera, so we were watching,” NightLight co-founder Anastasia Gentles says. “And at first it was like, oh, it’s OK, it’s just a flow, we can handle it. And then two hours later I was, like, OK, it’s done.”

The water almost reached the ceiling and the mold soon took over the whole place, she says, so they had to rip out everything.

The only thing that still reminds of the former children’s practice are some self-glowing stars on the ceiling of one room.

“All these were rooms and this was a hallway,” Gentles says as we walked through. “And we had beautiful murals up and everything. They’re all gone.”

It’s one of seven NightLight locations across Houston.

Reconstruction will probably cost more than $300,000, but luckily they have flood insurance which should cover most of it.

But this was their busiest branch, Gentles says, accounting for a quarter of their entire revenue.

That revenue has been missing for weeks now because it’s taking a long time to rebuild the Humble office, in part because contractors have been in high demand after Harvey.

“Because you can’t even find a pod in this city right now,” Gentles says. “We had to rent a U-Haul, so we had to pay for a U-Haul to sit in the parking lot with our cabinets in there.”

She estimates rebuilding will take three to six months so they are currently looking for a temporary location in the area.

Until they find one, their 15 employees are commuting to other branches across the metro.

And Harvey hasn’t just affected those businesses that were flooded.

“A lot of the businesses we work with are restaurants or service industries,” Steve Lawrence, executive director of the University of Houston’s Small Business Development Center, says. “And a lot of things stopped for a week or two, so everybody’s been affected in one way, shape or form, even if they haven’t received sustained flooding by themselves.”

So what has the impact been on overall small business productivity in Houston?

Small business software company Womply looked at the average revenue of 5,800 Houston businesses before the storm and how it was affected during Harvey and in the 10 days after.

“And what we saw was that while there was a pretty dramatic initial decrease in average revenue for local businesses, things rebounded actually fairly quickly,” Womply’s Brad Plothow says, “which was not what we expected.”

Revenue plummeted across industries but most returned to 80 to 100 percent of typical daily revenue within a week.

The impact and recovery has been very different depending on location, Plothow said.

“And there were some industries that were more affected than others, and those are the ones that you might imagine: It’s retail and wholesale, it’s entertainment,” he says. “Interestingly, lodging never dipped below 80 percent of its average revenue.”

Plothow attributes that to the many displaced people who needed a place to stay after being flooded out.

Overall, he says, it helped that many Houstonians have gone through similar disasters before and are therefore prepared.

Steve Lawrence, at the small business development center, seconds that.

He cited the case of a local bakery chain that has been flooded several times and got back up each time.

“Some people who’ve gone through the experience before know how the system works and how to be able to get through it a little bit faster maybe than some of the new ones,” he says. “But I think every case individually is different, every single case has got its own little quirk that makes it a little bit different than somebody else’s.”

So far, the Small Business Administration has approved nearly $20 million in low-interest loans to businesses in Harris County.