5 Awful Places to Start a Business

Kelly Spors

When most entrepreneurs decide where to locate their business, they think about things like market demographics and the local economy. But there’s something more basic they perhaps should consider first: The likelihood of an extreme-weather event.

Severe weather, from hurricanes to tornadoes to floods, can take a large toll on small businesses—wiping out revenue and even forcing businesses to close for good. Hurricane Sandy caused more than $250,000 in damage at 19,000 businesses in New Jersey and caused total business losses of $8.3 billion, according to a report by the National Hurricane Center.  Nearly 40% of small businesses never reopen their doors after a disaster, according to the Federal Emergency Management Administration (FEMA)

So where are the worst places in the U.S. to have a small business when it comes to extreme weather? Here are five:

1. The Gulf Coast.

As we enter Atlantic hurricane season, many towns along the Gulf of Mexico in the south are bracing themselves, and they should be: Florida, Louisiana and Texas are the top three states for hurricane landfalls since 1851, according to the Atlantic Oceanographic and Meteorological Laboratory in Miami. The worst state, by far, is Florida, which receives 40% of all U.S. hurricane landfalls.

2. Florida.

Oklahoma’s “Tornado Alley,” as it’s often referred—gets a bad rap when it comes to tornadoes. But it’s the Sunshine State that actually has the most tornadoes on average compared to its landmass. Florida gets on average 12.3 tornadoes each year per 10,000 square miles, according to an analysis by Dr. Greg Forbes, the severe weather expert for the Weather Channel. “Several things contribute to there being a lot of tornadoes in Florida,” Forbes told Weather.com “It’s surrounded by water so they can get tornadoes any month. Also, Florida is the thunderstorm capital of the United States. It has the most thunderstorms per square mile and some of those storms produce tornadoes.” No. 2 and 3? Kansas and Maryland, respectively.

(Do you have the right coverage if severe weather strikes? Find our with our Commercial Property Insurance Guide.)

3. New York.

Certain parts of the U.S. require flood insurance due to the risk of flooding. But there are a couple places that are at very high risk of flooding and have very high cleanup costs. An analysis by the World Bank found that Miami, New York and New Orleans all have high flood risks along with very high cleanup costs.

4. Upstate New York.

Snow can be just as disastrous as water to businesses, especially when it leads to major power outages. Several cities in upstate New York, including Syracuse and Rochester, are among the snowiest in the nation, according to Weather.com. Of course, it can be far more disaster-like to get snow in a city that doesn’t know how to deal with it. Don’t forget what happened in Atlanta in early 2014 due to a minor snowstorm.

5. California.

Droughts pose risks to many industries, and large swath of California are experiencing the worst drought in 500 years—with no end in sight. Cities in central California, including Bakersfield and Fresno, are experiencing particularly bad drought conditions, according to National Drought Mitigation Center at the University of Nebraska-Lincoln.

Of course, every part of the United States has its own weather risks. While you can avoid the most disaster-prone areas, it’s important to have a severe weather disaster-recovery plan regardless of where your business is based.

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