David Lewis

UGA small-business consultants help the Mississippi coast recover from Hurricane Katrina

Before Hurricane Katrina plowed through Bay St. Louis, Miss., the quiet coastal city was known for its beachfront summer homes, thriving art community, and quaint shopping district. But on Monday, August 29, 2005, the Category 3 storm devastated more than 70 percent of the city’s homes and businesses and left $125 billion worth of rubble heaped up to eight-feet high along a 30-mile stretch of coastline.

Everyone on the Mississippi, Alabama and Louisiana coast was in the same boat after Katrina, but business owners had lost doubly. Their homes had been ripped down to their foundations and their businesses were hardly recognizable as having been free-standing structures. Lawyers, accountants, realtors, bankers, marketing reps, restaurant owners and contractors all had the same overwhelming question: my business is gone, my home is gone, now what do I do?

Scott Manley

In the wake of the storm, Americans around the country gathered emergency supplies to meet survivors’ basic needs and the call went out to help businesses get up and running. The Georgia SBDC Network responded.

“Mississippi had three or four different relief centers that the nation’s Small Business Development Centers (SBDCs) were helping out and it just so happened that our team got assigned to Bay St. Louis,” said Darrel Husley, an SBDC business consultant. “Other teams from across the country were helping out along the coast, too.”

Hulsey, Ron Simmons and David Lewis from the University of Georgia’s SBDC and Cecil McDaniel from the Clayton College and State University SBDC left for Bay St. Louis on October 2.

Scott Manley

“In two weeks time, the four of us worked with over 100 different businesses,” said SBDC regional director Ron Simmons. “And out of 100 businesses, I think two or three had financial records, and that was it.

“We would ask them, ‘What were you doing before the storm?’ and they would look at us and say, ‘Oh, I was doing a half million dollars in sales’ or ‘a million dollars in sales’ or whatever the number was. And then their face would fall and they would say, ‘And now I don’t have anything.’ We would have to reconstruct their financials as best we could to help them make an application.”

Reconstructing financials meant filling out a personal financial statement for each client that included a history of the business, its pre-storm financial position, what it owned and what it owed, how many employees it supported, and its cash flow projections. Most of the individuals who came for help had to rely on memory and guesswork to complete the myriad SBA loan forms, which had already been pared down to the basic information necessary to get individuals into the system and speed the approval process. Knowing what questions to ask to help uncover financial information was difficult, but none of the SBDC consultants who volunteered in Bay St. Louis were rookies.

“We help people prepare their applications for loans for expansion or growth as well as start-ups in our normal, daily routine, so we’re familiar with the programs, we’re familiar with financial statements, and we’re very familiar with small businesses,” Simmons said.

The consultants understood that their job in Bay St. Louis was to ask the right questions and listen carefully to clients’ stories to help them remember their pre-Katrina income, expenses and debt. Because the majority of clients lacked backups or hard copies of that information, the application process took between 45 minutes and two hours to complete.

“It was a very diverse group,” said SBDC business consultant Scott Manley, who was part of the second team to travel to Bay St. Louis. Manley, from the Valdosta State University SBDC, and David Dunn, a UGA SBDC consultant, made the journey to Bay St. Louis on October 17. They also set up satellite locations in Picayune and Diamondhead, Miss.

From October 2 to 27 both teams of consultants worked 10-hour days for two weeks, occasionally helping clients right up until the mandatory 8 p.m. citywide curfew kicked in and forced them to stop for the day. They helped printing companies, air conditioner contractors, artists, realtors, attorneys, bed and breakfast owners, convenience store owners, gift and antique shop owners, electrical contractors, bail bond companies, and rental property owners.

“The common denominator was that most of them had lost everything that they owned, both business and personal,” Manley said.

Part of the SBDC consultants’ job was to help Mississippi business owners think laterally, consider alternative strategies, and ponder new directions to take their businesses. They were able to provide an arm’s length, non-emotional perspective that most coastal business owners lacked at the time.

“Some of these people were in shock,” said SBDC regional director David Lewis. “They didn’t really know what they were going to do. Others of them had gotten past that they’d lost everything and had a pretty clear understanding of where they were going.”

The consultants often asked, “Were you happy with your business?” and “What would you change or do differently?” Although Katrina left devastation all around, the storm also provided small business owners the opportunity to rethink their plans and rebuild. Some small business owners were able to start over in entirely new directions. Still others had to make the difficult decision to leave and begin life again elsewhere.

Returning Home

Maria and Dave Russell are one such couple. After finishing a three-year contract as captains of the boat manufacturer Boston Whaler’s traveling “Unsinkable Legend Tour,” they had only been back at home in Bay St. Louis for a week before Katrina hit. They lost everything to the hurricane and their waterfront home was reduced to little more than a concrete slab.

David Lewis

“After returning from Arkansas, where we had evacuated, we felt the need to stay in Bay St. Louis for a while and help somehow,” Maria Russell said. The couple lived in a camper attached to their truck until receiving a FEMA trailer in October 2005 and volunteered at the Hancock County Chamber of Commerce.

Although they had lost everything and had their own personal affairs to tend to, the Russells focused on the needs of their community. They worked alongside the SBDC consultants at the Chamber of Commerce’s Small Business Assistance Center, which had temporarily relocated to the Coast Electric Conference Center in Bay St. Louis.

“I found Ron Simmons and Darrel Hulsey to be compassionate beyond words,” Russell said. “Their clients were so appreciative and in the early days following the storm it was not unusual for them to wait two-to-three hours to be seen. Ron and Darrel hardly had time to go to the bathroom, much less eat lunch.”

But the Russells, like many other coastal residents, found they could not stay. Eight months after Katrina destroyed their home, they made the difficult decision to leave Bay St. Louis. “The county is running out of money and can’t deal with things like spraying for mosquitoes, filling huge potholes made by the big debris trucks, removing the hundreds upon hundreds of trees that are dead but still standing, and it’s depressing,” she said. “Immediately after the storm survival kicked in, but now it’s just living with it.”

A Year Later

More than a year later, Bay St. Louis, like other coastal U.S. cities, is beginning to return to a semblance of pre-Katrina normality, even though the landscape looks much the same as it did when Simmons, Lewis, Hulsey and McDaniel arrived in early October 2005.

“We could drive for 30 miles in each direction on the coast and everything a mile back from the ocean looked like bulldozers went through it. It was just gone,” Lewis said.

David Lewis

Not only was the physical landscape devastated, but the economic landscape looked bleak. Very few businesses had reopened by October 2005 — one month after Katrina — and the 10 or 12 that had reopened were doing limited business. Most of the region’s minimum-wage employees had evacuated and were not coming back. Wal-Mart was selling items from a tent in the parking lot and large chain restaurants refused to seat more than four or five tables of people, whose food they served on paper plates with plastic utensils. Many people were busy working — utility crews, clean-up crews, volunteers and emergency people, not to mention residents who had returned to try to salvage their homes — but there was no commerce, Lewis said. And yet it is commerce that creates jobs, without which individuals are unable to rebuild their homes.

Most of the residents who had returned to Bay St. Louis were living in tents placed on the concrete foundations or lawns of their former homes, awaiting insurance and disaster relief funds to begin rebuilding. Like some volunteers, both Simmons and Dunn drove their personal RVs to the coast, and it is there that the SBDC consultants lived while helping small business owners apply for Small Business Administration loan packages. They parked at the Coast Electric Conference Center in Bay St. Louis and were provided many of the amenities that the city’s residents lacked, such as electricity, running water, wireless Internet, and air conditioning. A private contractor provided food and security.

“We had it better at that time than a lot of the local people did,” Simmons said. “The FEMA trailers had just started to arrive. You could drive around town and people were sleeping in tents in their yards.”

Normal LIfe

Rob Simmons

Although “normal life” had entirely ceased to exist, Darrel Hulsey recalls the graciousness and hospitality with which the group of SBDC consultants was received. “Even in light of their situation, they were still hospitable, good-hearted people,” he said. “It’s hard to imagine that in those circumstances people would still be that way. And yet, in spite of this massive loss, the spirit of entrepreneurship was still there.”

Hulsey was not the only consultant to return to Georgia having witnessed not only the total devastation of the Bay St. Louis area, but also to recognize the resiliency of the residents and business owners.

Business is bouncing back. Exactly six months after the consultants’ trip, 703 Hancock County business owners had been approved for a total of $81 million in SBA disaster loans, according to the Hancock County Chamber of Commerce. Thirty of those business loans closed by December 15, 2005 — two months after the first team of Georgia SBDC business consultants arrived in Bay St. Louis.

“These folks had a good life,” Hulsey said. “They were very much normal, real human beings like you and I, living what we could call the American Dream, and they were very unwilling to give that up in spite of the fact that they had suffered tremendously.”

Amanda E. Swennes

Tags: Business, Hurricane Katrina, Mississippi, Winter 2007