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VOL. 36 | NO. 12 | Friday, March 23, 2012

Big disasters equal big business

Winds of climate shift bring opportunity for entrepreneurs

By Linda Bryant

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A freakishly early 2012 tornado season in Middle Tennessee began with a deadly tornado outbreak on Feb. 29. Less than a week later the area was hammered with a series of storms, tornadoes and golf ball-sized hail.

That’s when the phone lines began to jam at National Storm Shelters in Smyrna.

Ditto for Lyk-Nu Collision Center locations in Donelson and Lebanon, where co-owner Paul Slate says his lobbies were crowded with anxious car owners trying to get their battered vehicles repaired.

Bad weather is good business. The worse the better.

Storm-related insurance claims topped $1 billion across the state in 2011, and the recent storms that hit in late February and early March will create about $90 million in claims, says Dan Batey, vice-president of corporate communications for Farm Bureau Insurance of Tennessee.

“I’d call that one heck of a stimulus package (for businesses helping storm victims),” Batey says.

And with national weather prognosticators predicting the South will continue to see more than its usual share of severe weather outbreaks over the next couple of years, demand is rising for companies that cater to all things storm-related.

Owner Jeff Turner, lower right, and employees of National Storm Shelters demonstrate the size of the company’s shelter. Units are installed underground and entered from above.

-- Photo: Lyle Graves | Nashville Ledger

Count among them area service-based businesses such as shelter installers, roofers, auto repair, window and gutter outfits, handymen and re-modelers.

“Business is up 45 percent across the board,” Slate says of his auto body-repair business. “We even had to go to making appointments even for estimates. An insurance company even set up a table at the Donelson location.”

Carl Cotten, who’s been running Carl Cotten Roofing Co. since 1959, says recent years have brought some of the worst weather he’s witnessed since be began his business 53 years ago.

“I always get a lot of calls when a disaster comes,” Cotten says. “It just seems like the disasters and catastrophes get worse as time goes on.”

A National Storm Shelters employee welds a shelter lid. Company sales are about 60 percent ahead of 2011 year-to-date totals.

-- Photo: Lyle Graves | Nashville Ledger

Larry Hooper, marketing director at National Storm Shelters, agrees that keeping up with demand can be a challenge.

“People call all hours of the day and long into the night,” Hooper says. “Our phones get swamped within 36 hours of a tornado. The greater the storm, the greater the caller volume.”

National Storm Shelters was inspired by a devastating tornado in Murfreesboro in 2009. Company owner Jeff Turner had a buddy whose home was destroyed by twister. The experience drove Turner to design and build an underground steel shelter that can be installed beneath a garage or carport floor.

The shelters cost about $5,500, the industry average, Turner says, adding he sold 150 in 2011 and has already sold 70 in 2012.

“I feel comfortable in saying we’ve increased sales by 60 percent over last year,” he explains.

The company has plenty of competition in Middle Tennessee.

Mark Brasfield, owner of The Safe House, a Nashville-based company that sells safes for guns and valuables, as well as storm shelters, says he receives 20 calls a day -- and just as many emails -- after a bout of severe weather. Brasfield sells and installs a self-designed shelter that he says exceeds standards required by the Federal Emergency Management Agency.

Another longtime Nashville-based company, West End Lock Co. started offering storm shelters designed by an award-winning company in Oklahoma almost three years ago.

“We weren’t looking for a growth industry,” owner Richard Kass says. “We’re primarily a locksmith company. I just wanted to add a service for our customers. It’s almost ridiculous how much we grew that side of the business.”

Disaster recovery businesses also swell with business after foul weather.

Rob Dixon, owner of ServPro of Belle Meade/West Nashville, says he was inundated with calls about water damage and roof damage from recent storms. Ironically, Dixon’s roof was also damaged during the outbreak.

Funnel clouds and hailstorms may mean added profits for some companies, but they mean less money for insurance companies such as Farm Bureau, Batey says.

“We’ve taken a good lick so far,” he explains. “It’s tougher to make a profit and, of course, the insurance industry is regulated. You can’t just jack up with price out of the blue.

“Sadly, it’s becoming more and more routine to deal with catastrophes in Tennessee,” Batey adds.

TV stations represent another example of businesses vulnerable to revenue loss during parts of the tornado season.

When the station interrupts scheduled programming for severe weather coverage there is no revenue from commercials, says Debbie Turner, general manager of NewsChannel 5, Nashville’s CBS affiliate.

“Severe weather is a complete drain on advertising,” Turner explains. “It becomes a public service. We want to maintain technological leadership, and we want to save lives. It’s all a very important part of our brand.”

However, the trust built during coverage of a tornado might turn into advertising revenue at some point.

Channel 5 sells sponsorships that are displayed on the bottom of the TV screen during weather broadcasts. Revenue from sponsorships is growing, Turner says.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 0 0 0
MORTGAGES 0 0 0
FORECLOSURE NOTICES 0 0 0
BUILDING PERMITS 0 0 0
BANKRUPTCIES 0 0 0
BUSINESS LICENSES 0 0 0
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0