Small-Business Owners Reeling on Gulf Coast

Thousands of small businesses in Louisiana were uprooted by Katrina. Their problems are acute because most need cash coming in quickly to survive.

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In his speech from New Orleans last night, President Bush promised tax relief and loans to small businesses on the Gulf Coast. Mom-and-pop outfits in the region say they need all the help they can get as they survey damage from Hurricane Katrina and try to keep from going out of business. NPR's Frank Langfitt has that story.

FRANK LANGFITT reporting:

Karen Greenbaum runs a court reporting company in New Orleans. Recently, the firm celebrated its 10th birthday. Now Greenbaum's worried it won't last the year. Her employees are living in temporary places as far away as Nevada. The law firms she served are gone and her tiny company, Alliance Reporting, has almost no income.

Ms. KAREN GREENBAUM (Owner, Alliance Reporting): I don't know if my business can survive this 'cause, you know, everyone is so scattered and I have two reporters whose homes probably cannot be rebuilt. My home is underwater and I don't know if it can be rebuilt. I don't know if some of the people are ever going to come back this way. Some of the smaller law firms that we dealt with, I don't know, you know, if they are going to reconstitute the business. It's very frightening.

LANGFITT: Most big corporations have the money to survive a disaster, but small businesses are another story. Many carry modest cash reserves and don't have insurance. Tony Martinez runs a business incubator at Louisiana State University in Baton Rouge. He says most companies in the state have fewer than a hundred employees, and he worries Katrina may force many of them to close.

Mr. TONY MARTINEZ (Business Incubator, Louisiana State University): When you sit and you look at records about all the different counties and cities in Florida that were hit by Hurricane Ivan and Hurricane Charley and how many businesses didn't come back. And so, the--you know, Louisiana being at the lower end on the economic end, you know, every business that we lose is crucial.

LANGFITT: Without clients, workers or access to offices, small businesses are improvising. Allen Kelly renovates older homes in New Orleans. Now he's living in the Houston suburbs picking up small painting jobs to bring in a little cash. Kelly's posted his temporary address for clients on allneworleans.com, a Web site for dislocated businesses. He's also changed his phone number after call volume overloaded circuits around the city.

Mr. ALLEN KELLY (Renovator, New Orleans): It was a (504) cell phone number. With all the damage to the cell phone system in New Orleans and metro New Orleans, it was very difficult to contact anyone. So I did a temporary switch to the Houston area and it's been much better since.

FLINTOFF: Some small businesses were prepared for disaster. Sutaher Cina(ph) runs ReliaGene Technologies, which tests DNA in criminal and paternity cases. Before fleeing his offices in suburban New Orleans, Cina put all his samples in a metal cage on the second floor. He also has insurance to cover his payroll, which runs $300,000 a month.

Mr. SUTAHER CINA (ReliaGene Technologies): So I had business insurance, interruption insurance, hurricane storage plan, backup plan for server, everything I had. I was very worried that something like, you know--last year when hurricane hit Florida, that was an eye-opener for me.

FLINTOFF: Katrina is certain to put some small firms out of business, but it will create opportunities for others. Kelly, the home renovator, has stayed in touch with customers and craftsmen using his BlackBerry, a mobile e-mail device. As soon as the waters recede, he plans to start back up in middle-class and suburban neighborhoods like Lakeview and old Metairie.

Mr. CINA: If the government has not condemned a lot of these houses in the neighborhoods that I've worked in, then there's going to be a world of work to be done.

FLINTOFF: New Orleans Mayor Ray Nagin plans to open up a number of areas to businesses for the first time this weekend. Owners see it as a step forward, but many wonder how long it will take for their clients and the city's infrastructure to come back. Frank Langfitt, NPR News.

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