U.S. small businesses are widely recognized as the "backbone of the U.S. economy," particularly so since they employ approximately 60 million Americans, or nearly half of the workforce. As such, they are said to be at risk from extreme weather and climate change and must take steps to adapt, according to a new report issued by Small Business Majority (SBM) and the American Sustainable Business Council (ASBC), Climate Change Preparedness and the Small Business Sector.
Featuring case studies from the retail, tourism, landscape architecture, agriculture, roofing and small-scale manufacturing sectors of the U.S. economy, the report finds:
* Lacking access to the capital and resources of large corporations, small businesses can suffer lasting economic damage as a result of a single extreme weather event.
* An estimated 25 percent of small to mid-sized businesses do not reopen following a major disaster.
* The median cost of downtime from a small business affected by an extreme weather event is $3,000 per day. Small businesses' physical assets tend to be more concentrated, a single building or factory could represent most of the book value of a small business, whereas large businesses are more geographically diversified.
* The majority of small businesses have not closely analyzed the potential economic losses from extreme weather events or other climate-related risks, in part due to a lack of resources to do so. Fifty-seven percent of small businesses have no disaster recovery plan, and for those with plans, 90 percent spend less than one day a month preparing and maintaining them.
Extreme weather events associated with climate change pose a variety of direct and indirect risks to small businesses that vary by geographic region, proximity to coastlines and the nature of the business affected. Directly...