Disasters Can Freeze a Small Business |Be Smart. Plan, Prepare Now

Region VI - South Central Region  - June 27, 2018

u s small business administration
Randy and Yvette Maldonado, owners of Koastal Kona Ice of Corpus Christi

Randy and Yvette Maldonado, owners of Koastal Kona Ice of Corpus Christi are ready for the next hurricane.

Disasters Can Freeze a Small Business

Be Smart.  Plan, Prepare Now

Dottie Overal, Acting Regional Administrator, Region VI

By Dottie Overal, Acting Regional Administrator, South Central Region

Randy and Yvette Maldonado, owners of Koastal Kona Ice of Corpus Christi, Texas, are better prepared today than they were a year ago when Hurricane Harvey barreled along the Texas coastline. After their business took a financial hit from that storm, the couple is prepared to survive and recover from anything Mother Nature or man throws their way in the future – not just physically, but financially.

Last year, as the hurricane approached, the Maldonado’s took all the right precautions to keep the company safe, including parking their snow cone trucks at just the right angle to withstand the strong winds.  After the storm, the trucks were still standing without a scratch. It appeared that it was “back to business as usual,” however, schools were cancelling planned activities.

“That’s when it got serious for us,” said Yvette. “That’s when it got real. For residents directly impacted by the storm, it was a slow crawl to getting back on their feet to resume normal course of living.”

Ready.gov graphic

A huge portion of Koastal Kona Ice’s revenue comes from serving their Hawaiian-style shaved ice at school activities, graduation parties, weddings, community festivals, sporting and church events.  Most of their regular customers were spending on necessities like hotels, home repairs, gas, food and supplies, not frozen treats. Business sales began a decline that lasted for months. 

 “We were counting on that money to get us through our winter months,” Yvette said. 

Today the business is still going strong with about 13 employees, thanks in part to an Economic Injury Disaster Loan (EIDL) from the U.S. Small Business Administration (SBA). EIDLs are a lifeline of up to $2 million in working capital to help small businesses survive a federally-declared disaster until normal operations can resume. 

“The SBA Disaster Loan was critical,” said Yvette who was surprised SBA offered that kind of assistance. “It was 10 out of 10 on the scale of how significant the loan was for our survival.” 

In the Lower Rio Grande Valley District, which includes Corpus Christi, SBA approved a total of more than $247 million in low-interest, long-term loans to help homeowners, renters and businesses of all sizes recover from the impact of Hurricane Harvey.  Of that total, nearly $70 million went to businesses.

Yvette is now proactively budgeting and planning in preparation of the next disaster, and advising other small business owners to do the same.   

“Weather is a big factor in this industry,” she said.  “Bad weather = no sales. You have to take into consideration that sometimes you may not be operating for a week or two. You have to factor that in and set your sales goals a little higher.”

The 2018 Mid-Atlantic Hurricane Season has begun, and the National Oceanic and Atmospheric Administration (NOAA) predicts a 75 percent chance of a normal or above-average hurricane season.  NOAA’s forecasters predict a 70 percent likelihood of 10 to 16 named storms, of which five to nine could become hurricanes, including one to four major hurricanes.

It’s time to get ready and make sure your small business has a plan and a budget to withstand any potential lapse in revenue. 

Before and after the disaster, SBA offers funding, counseling, contracting, and recovery services.   We help entrepreneurs start, develop and grow resilient businesses that can endure disasters, be it physical or economic.

Contact the SBA Lower Rio Grande Valley District where Director Angela Burton and her team can provide answers to your small business questions and direct you to local assistance.  Follow them on Twitter @SBA_LRGV or visit www.sba.gov.

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Tim Jeffcoat, Houston Director

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