Small Business in the Face of Crisis: Identifying Barriers to Recovery from a Natural Disaster¹

The crisis management literature has not dealt in depth with small business response to disasters. This study takes a qualitative approach to consider how small businesses respond to and recover from a large disaster, by interviewing stakeholders in five different communities in the Gulf Coast of the United States. Events that are considered to be crises in nature are usually characterized by high consequence, low probability, ambiguity, and decision making time pressure. Hurricane Katrina and its aftermath caused small business owners in the U.S. Gulf region to experience each of these. Findings include lack of planning by small business; vulnerability to cash flow interruption; lack of access to capital for recovery; problems caused by federal assistance; and serious infrastructure problems impeding recovery.