In the Press

Small Businesses Struggle Post-Katrina

September 28, 2007

Many small businesses in Louisiana and Mississippi are struggling post Katrina, but others are flourishing.

Sports Barber Shop in St. Roch was packed Friday afternoon. Barber Cedric Trim says this is normal. With the lack of barber shops operating two years after Katrina, this business is a cut above right now.

"We're taking it one day at a time. You know everybody's happy. Keep your customers happy, they keep coming back and that's the main thing we focus on," Trim said.

But according a study of small businesses by the Political and Economic Research Council, this barber shop is in the minority when compared to other African-American owned businesses. It found 8 in 10 are doing worse now than pre-Katrina. Dr. Michael Turner is with the think tank PERC that conducted the study.

"A number of the traditionally and predominantly African-American neighborhoods were among the hardest hit so they suffered the most damage but they also suffered the most depopulation," Turner said.

The study also found that a quarter of small business owners directly affected by Hurricane Katrina are doing the same or better than two years ago.

"If you look at the data you could be despondent but the small business owners, those in the trenches are very creative, extremely resilient and they're committed to keeping their doors open," Turner said.

Meanwhile, many Hispanic small businesses are flourishing. The study says 60-percent of Hispanic business are earning the same or more than prior to the 2005 hurricane season, especially in the construction industry. Rufino Saavedra's company, Rufino's Painting and Construction Inc. is thriving.

"Our revenues I would say maybe doubled, maybe tripled at this point, so I think that definitely the Katrina disaster helped us a lot to the people who are in the right business, which is construction," Saavedra said.

The study indicates under more typical disaster recovery, the construction demand would start to decline after a couple of years. But Katrina caused destruction on a scale never seen in recent history, and work for businesses in the rebuilding will continue for years to come.

PERC found the biggest challenge for small businesses has been getting credit, and now Dr. Turner says many businesses are falling behind on bills and collection agencies are taking action.