When extreme weather disrupts communities, small businesses often wind up being the first responders and first casualties. Investing in small business resilience can translate into fewer closures, less unemployment, faster recovery, and stronger local spending after disasters strike.
Two trends are colliding in state finance offices: Emergency, or “rainy day,” funds are shrinking at the exact moment climate-related revenue losses are mounting.
States are seeing their emergency reserves shrink for the first time since the Great Recession. The path forward is a new, two-pronged pro-growth, pro-resilience model that expands the state’s economic base while simultaneously modernizing the financial tools used to protect it.
When extreme weather disrupts communities, small businesses often wind up being the first responders and first casualties. Investing in small business resilience can translate into fewer closures, less unemployment, faster recovery, and stronger local spending after disasters strike.
By Joyce Coffee, guest contributor for The Epicenter and President of Climate Resilience Consulting
When extreme weather disrupts communities, small businesses often wind up being the first responders and first casualties. These storefronts, workshops, and independent markets connect residents to food, supplies, repairs, and care. Yet when it comes to rebuilding, resilience efforts tend to focus on major infrastructure, funneling investments toward stormwater tunnels and fortified levees while neglecting the engines that keep local economies running.
Fortunately, the same principles that guide climate-proof public development can also strengthen small enterprises—allowing local businesses to weather whatever storm may come.
Numbering around 35 million nationwide, small businesses are the backbone of the United States economy. They employ nearly half of the American workforce and account for approximately 43.5% of the GDP. When these local operations go down during climate-driven disruption, the knock-on effects touch everything from employment, value chains, consumer confidence, and municipal revenues.
But just as important is the role small businesses play immediately after a disaster. Grocery stores, hardware stores, pharmacies, mechanics, and contractors provide the basic necessities people need to get back on their feet. Because these shops are part of the community, their employees are often invested in helping their neighbors; as the Milken Institute has observed, they may also be positioned to reach the worst-affected areas before first responders arrive on the scene.
Their proximity and familiarity with local needs allow them to act quickly, problem-solving in real time. In the wake of the 2021 Pacific Northwest heat wave, for example, grocers and convenience stores in Seattle improvised to protect food safety: They pulled perishables from shelves, ran rooftop sprinklers to keep the building’s temperature down, and distributed bottled water to residents without air-conditioning. They helped keep their communities safe, cool, and connected even as larger systems stalled.
With severe heat, flood, wildfire, drought, and storm risks rising every year, each new hazard season exposes the critical role that small enterprises play. It’s crucial that they be equipped to weather the next disaster, and according to a 2024 survey by the U.S. Chamber of Commerce Foundation, 94% of small business owners believe they are. But in reality, only 26% of those polled had a formal disaster plan in place. For those without, the stakes are considerable: Around 40% of small businesses struck by a natural disaster never reopen. It’s crucial to close this gap between perception and preparedness. The resilience of a local economy depends on whether or not its small businesses can stay open and serve their communities during a crisis.
Traditional resilience strategies often rely on larger-scale infrastructure projects—seawalls, pump stations, and flood walls, for example—to make the landscape more adaptive to the changing climate. This type of development requires a lot of time and a lot of capital to execute, but luckily, the basic principles are easily scalable: Every business can adopt a parallel resiliency plan—one that transforms preparedness from an abstract goal into specific, measurable actions.
Step 1: Know the Risks
Every enterprise should begin with a quick climate hazard scan, reviewing flood maps, wildfire zones, and heat-risk indices for its ZIP code. Business owners should identify how each hazard could disrupt operations—whether through loss of power, impassable access roads, or supply chain delays—and rank them by likelihood and severity. Even a 30-minute tabletop exercise can reveal where to focus investment. For example, if a business operates in an area prone to flooding, securing HVAC units or shading western-facing windows can help avoid costly damage when a severe storm hits.
Step 2: Protect People
Employees are the first and most critical line of resilience. Business owners should create a contact tree and put someone in charge of activating it during emergencies, as well as cross-train staff so essential functions can continue even if one person is unavailable. Establishing clear evacuation and shelter-in-place procedures, ensuring everyone knows where to find local cooling and storm shelters, and confirming the availability of on-hand emergency supplies and accessibility for the whole staff are paramount. A business that keeps its team safe keeps its knowledge base intact.
Step 3: Protect Property and Operations
Simple measures add up: Businesses should keep critical equipment off the floor, waterproof basements, install sump pumps, and maintain backup power supplies. Regular maintenance—clearing drains, trimming trees, testing generators—reduces downtime dramatically should a natural disaster strike. Owners should also identify alternate suppliers, distributors, or temporary workspaces in advance. A shop that can relocate within 48 hours often secures customers for years to come.
One real-life example: After repeated floods damaged his Maryland restaurant, the owner moved operations uphill to a safer site through a resiliency initiative led by his county. By integrating flood-risk mapping, insurance reviews, and employee continuity planning—some of the same steps outlined here—he reopened and now reports record business.
Step 4: Protect Profitability
Financial preparedness bridges the gap between disruption and recovery. Businesses need to maintain digital copies of insurance documents and vendor contracts; review coverage for business interruption and equipment replacement; and keep at least two weeks of payroll accessible in a secondary account. Furthermore, diversifying revenue where possible is vital—by offering online ordering, delivery, or remote services, for example—so income doesn’t evaporate when the storefront closes. Tracking resilience investments also helps justify lower insurance premiums and may allow small businesses to qualify for public-private resilience funding.
Step 5: Maintain Communication and Continuity
A clear communication plan keeps customers, employees, and suppliers informed before, during, and after an event. Businesses should use multiple channels—email, text alerts, and social media—to announce closures or alternate arrangements, and maintain a digital folder, shared between employees, containing essential documents and contact lists that everyone can access from mobile devices. Finally, business owners should test continuity plans twice a year: Drills uncover small flaws before they become big failures.
Together, these five steps convert resilience from concept to capacity. They help business owners answer the practical question that every mayor, investor, or planner should ask: Can this business reopen quickly after disaster strikes? When the answer is yes, the return is measurable—not just in dollars saved but in community stability preserved.
Three lessons for strengthening small business resilience as anchors of local infrastructure stand out clearly:
Investments in resilience aren’t simply nice to have; they generate real savings and ripple benefits. Investing in business resilience offers high leverage: According to the National Institute of Building Sciences, private-sector building retrofits—including strengthening structures, reducing flood exposure, or improving energy performance—can save approximately $4 for each $1 invested. More broadly, adaptation measures can generate returns of more than ten times their cost. Specific to small businesses, a U.S. Chamber of Commerce study found that every $1 invested in climate preparedness can save up to $13 in damages, lost income, and cleanup costs.
Small businesses’ resilience also becomes community resilience. Increasingly, governments are beginning to recognize this, embedding business continuity and climate adaptation into policy. In Delaware, for instance, flood-vulnerable auto shops have partnered with the state and the U.S. Army Corps on wetland restoration investments that now protect both residents and jobs. That kind of collaboration illustrates a growing understanding: When small businesses can withstand and quickly recover from climate shocks, the entire community stabilizes around them.
Another example comes from Brownsville, Brooklyn, where the New York City mayor’s office and Department of Small Business Services are collaborating with a local nonprofit to fortify the commercial corridor along Pitkin Avenue against extreme heat and flooding.
Through the Neighborhood Small Business Climate Resilience Program, the plan focuses on retrofitting Brownsville’s small businesses and strengthening its streetscape against climate disruption. The initiative offers a roadmap for integrating small-business resilience into capital planning, hazard-mitigation strategy, and inclusion in incentive programs. When municipalities consider small business adaptations alongside investments in roadworks, water systems, and energy grids, they build a business community that keeps economies running, even when disasters threaten to shut them down.
For small-business ecosystems, these types of investments translate directly into fewer closures, less unemployment, faster recovery, and stronger local spending. This is the Resilience Advantage—the competitive edge that small businesses, and the local governments that depend on them, gain when they treat preparedness as a core business strategy rather than a discretionary cost. Resilience doesn’t just reduce losses; it builds market confidence, sustains jobs, protects municipal tax bases, and strengthens fiscal stability. Communities that prioritize it outperform those that don’t—economically and socially.
For small business owners, viability starts with practicality—concise checklists, neighbourhood-scale partnerships, and affordable financing. The missing piece? Local governments treating small-business resilience as infrastructure in its own right.
If cities consider sand-bagged storefronts, elevated warehouses, and cloud-backed data systems as part of their disaster preparedness plans, then local economies will not just survive the next flood, heatwave, or fire; they’ll keep humming through it. Resilience isn’t an expense line. It’s a local economic strategy—one that pays back in continuity, trust, and shared prosperity.
Joyce Coffee, President of Climate Resilience Consulting, is based in Chicago. Joyce leads strategic advisory services for government, nonprofit, business, and philanthropy.
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