Steady streams of relief aid, construction workers and displaced shoppers have turned the tables for Travis Bolster, 30. He opened his first Smoothie King franchise in Hattiesburg, Mississippi, four years ago. And he opened his Gulfport, Mississippi, location just weeks before Hurricane Katrina bore down on the Gulf Coast. "The whole time we had to evacuate, I was just bawling. All the talk was about devastation, and you [kept] asking yourself if anybody [was] going to come back," he recalls.
Reopening was delayed because the water supply was under a boiled water alert for the first few weeks after the hurricane--and it takes ice to make a smoothie. But Bolster repaired the storefront and held his entrepreneurial breath. "It's this huge investment, and I was thinking I would never see a return from it. Insurance only goes so far--if you don't have a customer, you don't have anything," he says. "I thought, 'What am I going to do? Business will never be the same.'"
Bolster was right. It wasn't the same. It was better. He finally reopened three weeks after the hurricane, and he says, "We're seeing a big spike in sales. In August, we did $34,000 in sales. In October, we did $56,000--a 65 percent increase from before the storm," he says, citing increased traffic from relief and construction workers.
Another reason for the surge: shopper displacement. A major retail shopping area of the Mississippi Gulf Coast on the beach at Gulfport was destroyed, and shoppers were forced to discover treasures inland. Bolster observes, "If you're in food or service, you're doing well right now."
With his wife, Jennifer, 32, Bolster has made a total investment of close to $200,000 per store; the goal is to recoup that investment within three years. The Bolsters have picked up rights to a franchise in Ocean Springs, Mississippi, and are preparing to open a second Hattiesburg store this year. "We've been fortunate," says Bolster. "We went from doom and gloom to joy and craziness."
Crash and Learn
When it comes to disaster preparedness, Al Waller, 45, of Fradella's Collision Center Inc. learned a hard lesson from Katrina. "I could tell you what not to do in this situation because of the mistakes I made," Waller says. "There were so many things we could have salvaged. I had two measuring systems worth $40,000 apiece. I could have moved them onto a lift, raised the lift five feet and saved $80,000 worth of equipment in minutes," he says.
Hurricane Katrina shook things up for Waller's auto collision repair business in other ways, too. Waller knew from market research that his New Orleans-area business made two-thirds of its revenue from customers within the St. Bernard Parish community of 67,000. All those people were displaced by Katrina, he says. The remaining one-third of the company's revenue came from New Orleans East and coastal Slidell, Louisiana. Waller faced the unpleasant truth: 100 percent of his customers had been displaced.
Once the storm dissipated, he started assessing. "We looked at getting as close as we could to where our customers had relocated," Waller says. "Most logical were Metairie and Jefferson Parish, so voilá, that's what we did."
Just 13 weeks out of the hurricane's clutches, Fradella's on Rye St. in Metairie became operational. Waller had only seven of his 23 original employees and had trouble finding skilled employees at an affordable price. "There's tremendous amounts of work, but getting the labor together to produce it is a real challenge," he says. "If we could find the labor, we could double our business in 12 months. The labor market has just shriveled."
Waller has some advice he learned the hard way: "Don't skimp on insurance. A small loss, just about everyone can survive, but a catastrophic loss like this--if you're underinsured, you've got no hope."
Thankfully, Waller had a few resources that saw Fradella's through the lean months. "We lived off the cash flow we established prior to the storm. We also lived off the fact that we had good credit and our vendors are working with us, which is a huge advantage, especially from a restart perspective," he says. That's good news, since Waller plans to reopen his original location this spring.
From Wisconsin With Love
While the Gulf Coast reeled, entrepreneurs from around the country reached out.
Wisconsin Film and Bag is one example: The Shawano, Wisconsin, manufacturer with $35 million in annual sales has a plant in Summit, Mississippi, one hour north of New Orleans. The area suffered widespread damage to property and homes, losing power for 11 days--and gaining an influx of evacuees fleeing the Big Easy.
Determined to assist in some way, Wisconsin Film and Bagpresident and co-owner Jack Riopelle, 60, started the nonprofit Wisconsin Cares About Mississippi just days after Hurricane Katrina hit. He partnered with The Salvation Army and asked companies for contributions of the things most needed in the early days of relief--staples like bottled water and medical supplies. By November, the organization had shipped 14 truckloads of donated goods to Mississippi.
It also provided a Thanksgiving dinner for more than 400, inviting evacuees and the volunteers who accepted them into their homes. With help from nine area churches, an additional 100 dinners were distributed to shut-in evacuees.
Riopelle says the experience was life-altering: "Not until you're there and you talk to people, and you see with your own two eyes what's going on, can you really have an understanding of just how much tragedy those individuals have gone through."