Small-Business Disaster
BP Spill Brings Misery and Opportunity
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Cooking Oil
With no shortage of coverage of the BP oil disaster, there’s been plenty of anecdotes, a growing number of lawsuits, and missed sales in tourism and residential real estate.
But now, detailed data compiled by Schwartz Consulting Partners in collaboration with the Tampa Bay Business Journal has found there are deep-seated concerns for Florida’s small-business community, that many business owners have BP in their sights and plan to seek compensation, and that many are considering drastic changes to their short- and long-term business plans.
“Economics is not a hard science. It’s a social science, and a lot of what happens is determined by what people expect to happen,” said Steve Runfeldt, vice president of analytical services at Schwartz Consulting Partners in Tampa, Florida, and the lead researcher on the project. “It’s the state of consciousness of the business community that determines the state of the economy.”
And as evidenced by the data, small businesses are bracing for the worst:
- Overall, 35 percent of the respondents expect revenues to be down by 10 percent or more in the next 12 months compared with 12 percent, which expect revenues to be up by 10 percent or more.
- More than two thirds of the respondent businesses said they are very concerned about the effect of the oil spill on their business.
- More than 50 percent expect a major negative impact on their business or industry, but fear more for the overall Florida economy, with 88 percent expecting a major negative impact.
- Respondents are somewhat less pessimistic for the Florida economy than for the Florida environment, as one in four believe the Florida environment will never be the same, and more than 50 percent believe it will take at least 20 years to recover, if at all.
- Nearly 30 percent of the respondents expect to have fewer employees in the next 12 months because of the disaster.
All the concern has the Tampa Bay area's business community looking for retribution.
Many of those businesses surveyed intend to hold BP to its promise to make the oil-spill ravages “right.” Filing an income-loss claim against BP is very likely or definite for 25 percent of the 631 survey respondents, and another 27 percent indicated it was possible.
That really got the attention of SCP’s Runfeldt.
“One in four here expect to file a claim, and we haven’t really even been hit yet,” he said. He’s heard anecdotes about Tampa Bay tourism absorbing business slated for the Panhandle. “But this data clearly does not show that. Business is down.”
Other businesses—mostly small businesses—have lost revenue because of the oil spill yet are unable to document losses and force BP to make it right because of the recession or types of businesses, according to the data.
Financial documentation showing past and current revenue is necessary for filing claims for losses.
“It’s impossible for most of us to do,” said Cindee Murphy, owner of Pies & Plates, a restaurant and gourmet shop in Punta Gorda, Florida. “We know there’s been an impact and loss, but how do you show a difference when you’re measuring against a year of recession? Last year was such a bad year.”
Murphy’s business, which is dependent on tourists, started out this year with a 10 percent increase over 2009. Then, after the spill, many visitors—especially foreign tourists—disappeared.
“We’re very, very dead now at the time when they used to come in,” she said. “Business has absolutely tanked. Can we measure it? No.”
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