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Steve Chaney considers himself lucky. When Hurricane Katrina slammed into the Gulf Coast Aug. 29, 2005, the storm knocked down eight trees on his 40-station Shag Bag Driving Range and Teaching Center in Ocean Springs, Miss. The high winds also blew his ball washer 40 yards away, ripped the door off his clubhouse and damaged his entrance road and the facility’s electrical hookups.
“Everything was just so devastated, and people are just trying to get their houses back in order,” Chaney says. “We’re still trying.”
But Chaney’s self-described “mom-and-pop” operation was back up and running by October. In addition to his business interruption policy, which covered some lost income during the range’s closure, Chaney’s land lessor was fully insured and owns a debris-removal business that got Shag Bag back on line quicker than most local businesses.
Chaney says he never thought of his hurricane preparations as part of any far-reaching plan. It all just seemed like common sense: Have insurance, including flood and wind, and the less-obvious business interruption policy, have a little money in the bank to cover expenses if something terrible happens and just work through any problems as they arise.
The only thing worse than a disaster to remind range owners just how vulnerable their businesses are is not being prepared for one. Hurricanes, fires, floods, employee theft, computer malfunctions—anything that prevents the range from continuing normal operations is a threat owners need to anticipate and plan for.
Continuity planning means preparing for all contingencies, no matter the emergency, says Bob Mellinger, president of Attainium Corp in Gainesville, Va., a company specializing in business continuity planning.
“I recommend writing a plan for your business that doesn’t necessarily cover everything that might happen, but just addresses the type of things you might have to do. For instance, there are hundreds of reasons you might have to evacuate a business, but you’ll likely always have to do it the same way,” he says.
Mellinger points to five basic principles of emergency management: awareness, preparation, mitigation, response and recovery. “The first thing is understanding what it is that could impact your business, your employees and your customers,” he says. “Then prepare. What is it you need to do—how to evacuate, what to do in a robbery, how to handle the media should you be in that situation? Basically, you decide what could happen and what you care about.”
Reopening the Range
In October 2005, the season’s 21st storm, Hurricane Wilma, shut down AllGolf at CB Smith Park in Pembroke Pines, Fla. High winds toppled the facility’s 50- to 100-foot-tall fences, the main protection for keeping stray balls off busy Flamingo Road.
AllGolf reopened 90 days later on Jan. 23, with the exception of the batting cages and the second-level tees. Damage to the clubhouse roof, which leads to the upper-deck tees is the big problem.
“For as hard as you want to work to get back up and running, the problem is there’s a huge shortage of contractors and materials [in this area],” says AllGolf General Manager Ricardo Catarino. “Despite your best efforts, it’s going to be tough to get everything done right away because everybody is scrambling. These contractors have so much work. It’s March now. It’s been five months and I’m still digging for a roofing contractor.” He estimates it will be another month or so before AllGolf is able to resume full operations.
Another problem Catarino faced during the extended closure was hanging on to his employees. AllGolf lost five of its 25 staff, and as the facility struggled to reopen, Catarino says it was “a scramble from a human resources standpoint.”
Recovery experts say such headaches can be prevented by researching local staffing comp-anies and potential suppliers and including those resources in the range’s business continuity plan. Having a contingency plan for critical functions will help the business reopen that much faster. For example, if fire damages the clubhouse, a trailer could be brought on-site within one or two days to serve as a makeshift base of operations.
Reopening their ranges quickly was paramount to both Chaney and Catarino.
“We had a lot of people that were real anxious to start coming back and practice,” says Catarino. “We had some special events for members and did some special pricing but we didn’t have to go crazy [advertising]; people were waiting for us to reopen.”
Chaney had a similar experience after Katrina.
“Everything was just the opposite of what I thought it would be,” he says. “You would think after a storm like this you would just be devastated as far as business goes, but business has stayed pretty steady. It’s like somebody said, if you can get your business open, whether it’s a driving range or a hair salon or a restaurant, then you’re going to thrive.”
Chaney worked hard to open the range for regular customers and those who needed the respite that an hour or so hitting balls can provide. “I had one guy come—he doesn’t even play—and I’ll never forget this: He had lost his whole house and he just came in to hit four buckets as hard as he could to take his frustration out.”
The shortage of services in cities hurt in the spate of hurricanes last fall is a double-edged sword for the rapidly reopening ranges in the region. Although resuming operations is a competitive advantage in a lessened competitive market, the shortage of hotels is affecting the South’s wintertime staple—snowbirds.
“The casinos haven’t all reopened down here so we get a little more of that business, but all the hotels are booked up with locals who are rebuilding or construction workers here to help,” says Chaney. “That’s the worst thing in the whole golf industry right now. We can’t do any snowbird business because there’s no place [for them] to stay.”
Compiled by the “damage to the infrastructure around town,” Chaney is uncertain if life on the Gulf Coast will ever return to its pre-hurricane state.
“We lost about a two-mile-long bridge connecting Biloxi and Ocean Springs, and they haven’t even awarded contracts to start rebuilding. [The range] is off the beaten path but we had a lot of people who came over that bridge to get here,” he says.
‘Insuring’ Protection
After a February storm delivered 93 mph winds to Granger, Wash., it wasn’t the roads that Randy DuFord, owner of Cherry Hill Golf Center, was worried about. It was his netting, and the winds ripped most of it down.
As he rebuilds, DuFord is considering installing cross-netting over existing netting as one solution to strengthen the system, but he’s also looking at a more natural option.
“You’ve got to put as many wind barriers around the golf course as possible,” he says. “We’re putting in more poplars. Those barriers work because the guys with orchards who had those wind barriers didn’t get hit as hard.”
Before Hurricane Wilma struck 60-station AllGolf, the facility’s big, beautiful oak trees had been trimmed. And it was those trees that weathered the storm best. Some of the larger oaks out on the range, with their thick display of leaves and branches, were all the more vulnerable to the high winds. Catarino estimates AllGolf has spent some $60,000 in tree removal since the hurricane. He also points out there’s more than just losing the aesthetic value of the trees: “When trees fall, they fall on something.”
That’s where insurance enters the picture to make sure the range avoids a second financial blow.
“You can never be over-insured in Florida,” says Catarino. “It’s tough now because it’s so expensive, but it’s worth it.”
The trick is determining adequate coverage for continued business operations. Experts suggest asking these questions: Does your insurance allow for keeping employees and keeping their health benefits through a temporary closure? Are you covered for loss of income and to help with the fixed expenses like mortgage and real estate taxes?
In preparing for a disaster, whether it’s a storm, a fire, theft or anything else, review the range’s coverage, says John Copenhaver, president and CEO of DRI International, a worldwide company focused on business continuity education and professional certification. “Read through your insurance policy and know what it covers and what it doesn’t cover,” he adds. “And for the things that it covers, how do you build a claim? Are you going to need to make sure you have documentation of your loss? Are you taking pictures of the damage? If you throw out things that are waterlogged before you take a picture, you may be affecting your insurance claim.”
Even with insurance, range owners need to be prepared to spend out-of-pocket cash or find creative cost-cutting measures for getting repairs done. DuFord’s insurance, for example, didn’t pay enough to fix damages so he cut some financial corners by hiring his “own guys” to do a lot of the labor at Cherry Hill, turning to employees and other freelance locals.
In Mississippi, Chaney eventually settled with his insurers, getting a check for $7,900 for lost income when his estimates put that loss closer to $25,000. “After awhile it’s not worth arguing with them,” he says. “You take your lumps and keep on going.”
Chaney had thought he might seek help through a Small Business Administration loan. The SBA sent him to the Federal Emergency Management Agency, where he applied for disaster relief the first of September.
“I was thinking I’d get some money in the next 30 days because it’s disaster relief,” he says. “They called me back in December and said, ‘We still need this and this.’ It’s a slow process with the federal government and I think more so since they defaulted on so many loans in New York City [after 9/11].”
Fortunately, Chaney was able to recover without federal relief. But he says getting his hands on cash in the wake of the disaster was a problem. “Like any business, you want to have a month’s operating expenses in the bank or you need access to a credit line,” he notes. “That’s a problem when the banks are underwater and all their computers are down. Even if they knew you real well, you couldn’t get more than about $300, even if you had $50,000 with them.”
DRI’s Copenhaver suggests going to the bank if trouble seems imminent and withdrawing enough cash to get the business through two or three days, probably not more than $400 total, depending on need.
“The important thing is to know what you need to have in order to continue business,” Copenhaver says. “Look at the things you do every day and look at the things you rely on to continue to do those things.”
It’s all about surviving as a business.
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