Content provided in partnership with

Business Services Industry

Disastrous effects: How does a business survive when it's too close to a national crisis for comfort?

Entrepreneur, Jan, 2002 by Mark Henricks

None of the 115 employees of New York City architectural firm Gruzen Samton were injured in the attacks on the World Trade Center. But the company's offices, located in a building practically across the street from the doomed south tower, didn't fare so well.

"When the tower collapsed, it destroyed the facade of our building, and the offices were a total loss," says company principal Mike Kazan, who was working in the company's Washington, DC, satellite office the morning of the attacks. In addition to millions of dollars in burned and broken furnishings and equipment, Gruzen Samton's losses included paper records, computer data, and thousands of irreplaceable photographic slides documenting the company's many projects.

Most Popular Articles in Business: Research and Markets : Tesco Plc - SWOT Framework Analysis; Do Us a Flavor - Ben & Jerry's Issues a Call for Euphoric New Flavors; eBay made easy: ready to start an eBay business? These 5 simple steps will ...; Katrina's lawsuit surge: a legal battle to force insurers to pay for flood ...; Wal-Mart's newest distribution center opened last month near the southwest ...; More »

Kristin Rhyne was nowhere near the twin towers, the Pentagon or the Pennsylvania field where hijackers crashed airliners on September 11. But the 31-year-old founder of Boston's Polished Inc. saw her business suffer damage nearly as extreme as Gruzen Samton. Rhyne, a Harvard Business School graduate building a chain of airport beauty spas, is dealing with new security rules forcing her to develop new manicure techniques that don't require sharp metal tools that would bar her from selling the previously innocuous-seeming manicure sets. In the immediate aftermath, potential customers stayed away from airports in droves, and those who did travel were snared in long lines at security checkpoints. "Our services have come back to 75 or 80 percent what they were," says Rhyne. "But it's a difficult scenario."

Post-Terror Business

These entrepreneurs, scarred but not destroyed by the September attacks, are exemplars of a new, post-attack business mind-set. They're using their survivor mentality to salvage what they can from the ashes, whether figurative or actual, so their companies can survive. Meanwhile, they're creatively seeking ways to rebound and generate more opportunity than even before the attacks.

Has anything good come of the tragedy? Perhaps one thing: Entrepreneurs have learned they have unexpected allies. Gruzen Samton was able to get partially back up and working by relocating some employees in office space lent by other architectural firms. "These people, who are our competitors on a daily basis, were very gracious in providing space for us, even working over the weekend to move people around to provide space for our teams," Kazan says. Other entrepreneurs have found the federal government a willing assistant, as the SBA moved quickly to declare businesses first in lower Manhattan and then the whole region eligible for disaster aid and low-interest loans.

In Manahawkin, on the Jersey shore just south of New York City, Travel Emporium co-owners Ann Bell, 59, and Marianne Newenhouse, 39, were pleasantly surprised to find their customers going out of their way to help their small agency as it suffered major revenue losses due to travel stalling after the attacks. "One guy called up and said he already had his airline tickets but he thought we might be able to use a car rental," Bell says. "He didn't say he could use it; he said we could use it. A lot of people were worried about us not just because we're their travel agent but because we're their friends."

Putting the Pieces Back Together

Dealing with disaster is a multi-pronged project. It may involve everything from assessing immediate needs to planning for new facilities, counseling grief-stricken employees, locating insurance policies, hiring interim managers to fill positions vacated by death or injury, and, if all goes well, communicating the news that you're back in business to concerned customers.

The first thing to do is take stock, says Marian McGovern, president of M Squared Inc., a San Francisco consultant clearinghouse that provided pro bono assistance to organizations dealing with the aftermath of the terror attacks. Recovering from a disaster requires first that you know as precisely as possible what has been lost in the form of buildings, equipment, furniture, information systems, data and, of course, people.

"Go through every aspect of the business and understand what has backup, what needs to be repaired, what has been totally destroyed," says McGovern. Department heads should come up with their own damage assessments, then present them to the CEO, so he or she can come up with a companywide tally.

In the real world, that can get messy Gruzen Samton's offices, which the company had just paid $2.5 million to renovate, were unusable, with the building likely to be condemned. Computers and the phone system were destroyed. All paper records, including marketing materials, customer lists and the photo library, were burned or waterlogged beyond repair. A fireproof safe full of backed-up computer files survived, but the CD-ROMs it contained had melted from the intense heat, and the data was unretrievable.

There was some good news, however. Fire-resistant file cabinets containing computer tapes with additional backups survived. "There is a certain amount of reconstruction of data because we don't back up daily onto those tapes," says Kazan. "But we've recovered a good portion of the work we had in progress."

Business Services Industry

Disastrous effects: How does a business survive when it's too close to a national crisis for comfort?

Entrepreneur, Jan, 2002 by Mark Henricks

Find Research Guides for:

Find Featured Titles for: Technology

Most Popular Articles in Business

Most Popular Publications in Business