Drowning In Debt - Small Business Almost Goes Under After Flooding
- Published on October 29, 2007
It was the most devastating experience I’ve ever had,” states Christine Bierman, owner and president of Colt Safety, Inc. in Brentwood, Mo.
On July 9, 1991, rising flood waters in the safety products distributor warehouse soaked $500,000 worth of inventory and sank the spirits of Bierman and her 18 employees.
“I thought I was out of business,” said Bierman, who founded the distribution company 11 years ago. Colt Safety, Inc. is a safety products and personal protective equipment (hardhats, sunglasses, raingear, etc.) distributor.
The company moved into their current location in Brentwood, a suburb of St. Louis, two years ago. And although they knew the building was in a flood plain, Colt Safety, Inc. had no flood insurance.
“Somebody dropped the ball,” explained Bierman about the lack of insurance. “We were told we needed it; we said get it. Somehow it was never gotten.”
The ramifications of that “dropped ball” were evident on the morning of July 9 as Bierman surveyed her 18,000 square-foot warehouse filled with four feet of water from heavy rains and the overflow of the nearby Deer Creek.
“The amount of water in the warehouse was equivalent to the amount in 10 Olympic-sized pools,” she said.
At 6 a.m., Bierman began calling insurance agents, attorneys, government agencies, “anybody that could help keep this business from going under,” she said.
Meanwhile, her employees began pumping the water from the warehouse, which is located in the lower level of the building, and bringing up anything salvageable to the upper office level.
“Our computer didn’t get wet, so we brought it upstairs and set it up to handle our shipping orders,” explained Bierman. “We actually shipped orders that first day. I'm still not sure how we did it. I was in shock.”
Besides the computer, very little other material was salvageable. In total, a half million dollars in inventory was lost. The soaked product filled four 40-foot dumpsters and took days to clean.
The flooding forced Colt Safety, Inc. to reorder all their inventory — a move which caused delays in shipping their current orders and sent demands for new orders spiralling by 20 percent.
“Luckily our vendors were willing to work with us. They got the products in to us right away and let us use long-term payment plans to buy the orders,” said Bierman.
In addition, Bierman had to hire industrial and restoration cleaners to clean the salvaged products and the debris left behind in the warehouse by the flood waters. The cost for industrial cleaners alone was $50,000.
Colt Safety, Inc.’s salvation came when Bierman contacted the Small Business Administration. They told her the Brentwood area could be declared a disaster and federal funds could be available to help the uninsured businesses in the neighborhood.
In total, the Brentwood businesses had a $2.9 million loss — enough to get the area declared a “small business administration” disaster, but not enough to qualify for free federal funds for rebuilding. Instead, low-interest, long-term loans were offered to the business owners.
The loans saved Colt Safety, Inc. from disaster.
And the floods taught Bierman a valuable lesson about disaster recovery.
The company is now fully insured against floods and precautions have been taken in the warehouse to keep products stacked above any future flood waters.
In addition, Bierman plans to lobby the local and state government to provide flood control on Deer Creek.
“Flooding from that creek has occurred three other times in the past 10 years. It has devastated two other businesses that were once in this building. I could have been wiped out this time. I’m going to do all I can to prevent it before it happens again,” explained Bierman.
Janette Ballman is an editor with the Disaster Recovery Journal.
This article adapted from Vol. 4 #4.