Missouri Cake Baker Is One of the Lucky Ones

Rioters in Ferguson, Missouri shattered the windows of Natalie’s Cakes and More and vandalized the baking equipment. However, when owner Natalie Dubose put her story on the internet, Americans immediately responded, donating more than $260,000 to help her rebuild her business.

The money was more than Dubose, an African-American small business owner, needed so she used the surplus donations to help the other 60 or so proprietors rebuild in the St. Louis suburb.

The contributions were timely, because it helped her immediately restore her shop and open its doors for customers. Keeping a loyal customer base is important, especially for small businesses. But stores shuttered by arson and vandalism often loses customers permanently because they’re closed too long.

Dubose is luckier than most small business owners. The U.S. Department of Labor estimates that 40 percent of businesses never reopen after experiencing a disaster and 25 percent of surviving businesses will lose their market and shut down within two years of a calamity. Even under normal circumstances, about half of all new establishments survive five years or more and about one-third survive 10 years or more.

Credit many protestors in Ferguson with attempting to stop the hooligans from bashing in shop windows, torching business and pelting police with rocks and bottles after a grand jury decided not to indict police officer Darren Wilson. However, they were overwhelmed.

The scene in Ferguson was much like what we witnessed in Seattle on Nov. 30, 1999 when anarchists used the WTO meetings as an excuse to wreak havoc on downtown Seattle. The damage goes far beyond the broken windows, because shop owners victimized by rioters lose significant income while their stores are closed – especially during the crucial holiday shopping season.

The Small Business Administration reports that some of the biggest concerns of small business owners are insurance costs, rising energy costs, taxes and tax compliance.

Small-business owners who have insurance buy what is commonly called a “business owner’s policy” which covers damages from rioters, including broken windows and stolen property, says Ted Devine, CEO of Chicago-based Insureon, an online site for small businesses seeking property and casualty insurance coverage.

The policy might also include “business interruption insurance” which is triggered by civil unrest. This coverage provides income to a business owner whose operations are halted because of property damage from rioting. But business interruption insurance is costly and those who have it usually opt for a 20 percent deductible.

The lack of business interruption insurance can spell doom for a small business.

Back in the 1980s in Montana, a father and son invested their life’s savings and put up their forestland as collateral to start a one-day photo processing operation. Customers would drop off their film on the way to work and pick up the prints on their way home.

One night, an electrical short caused a fire that gutted the processing plant. The cost to rebuild, coupled with the fact that they could not afford business interruption insurance, forced them to abandon their business. They had no business and no income, but still had to pay the mortgage – a debt it took them 20 years to repay.

Small businesses have a big impact on America’s economy. Small firms accounted for 63 percent of the net new jobs created between 1993 and mid-2013 – that’s 14.3 million jobs.

If we really want to help Natalie Dubose and others realize their American dream of owning a small business, then we should make sure they have an even chance of success. That starts with slapping handcuffs on rioters and putting them in jail.