Business Lessons for 2019 Spring Flood Risk


Flooding Getty Image
© Getty Images

Floods and power outages are the two most common disasters to affect businesses. It’s easy to think of disasters as something that happens to somebody else. None of us want to think that we’re vulnerable to events outside of our control, like disasters, but the truth is, it can happen to any of us. 

This spring, more than 60% of the continental U.S. is at elevated risk for flooding, according to a March warning issued by NOAA (the National Oceanic and Atmospheric Administration). Half of our states have already seen major flooding or are facing the possibility of major to moderate flooding through the end of May. Heavy spring rain, melting snow, and late snowfalls are combining to make spring 2019 an above-average year for flood risk. 

One of the most important things we can do in business is to learn from others who have faced—and overcome—the same obstacles we might face. The Cedar Rapids flood experience of 2008 is a captivating example of a shocking disaster and a story of recovery and community rebuilding.

In June 2008, the Cedar River crested at just over 31 feet. The river’s levy system at the time was built 22 feet high, and the last report received by city officials stated the probable flood level would be 24 feet. 

The Cedar River runs directly through the downtown and central business district in Iowa’s second-largest city. Record-setting snowfalls and severe spring thunderstorms created the flooding situation and while businesses and homeowners throughout the flood plain prepared for the flood, no one had predicted how devastating it would be. 

Access to flooded properties took days and recovery took years. Two silver linings in the Cedar Rapids flood experience are that the rebuilding efforts brought unity and camaraderie throughout the city and the business survival rate was significantly higher than what was predicted by disaster experts. 

One Cedar Rapids business owner recently shared the 2008 experience with us in the hopes that it would help other communities and business owners prepare for higher-than-normal flood risk this year.

Gary Ficken is the president of Bimm Ridder Sportswear in Cedar Rapids.

Every morning after the flood began, Gary woke up and tried to get to his place of business—a facility that manufactures and sells custom team apparel for major and minor league sports. Each time, he had to stop at the National Guard barricades. He couldn’t get a visual on his business. It was about a week before he was allowed access to his business. 

The Bimm Ridder staff prepared for the 2008 flood the same way they had for a previous severe flood—a flood that had caused no damage to Bimm Ridder. In 2008, sandbags were in place and furniture was elevated. At the last minute, Bimm Ridder’s IT manager told Gary to take the server with him, just in case. The IT manager walked him through how to shut the server down. Gary carried it out.  

When Gary finally had access to Bimm Ridder’s facility, he saw that the flood damage was far worse than expected or predicted. The building took on 6 ½ feet of water inside. The force of the water pushed desks through walls. All of the machinery and equipment was under water and was lost. 

Bimm Ridder had been in business for 20 years before the flood and was a successful, profitable company. No insurance agent over those two decades had ever mentioned flood insurance to Gary. 

When the Small Business Administration gave Gary the estimated loss to the company from the flood, the numbers came in at $1.2 million. Insurance paid the company $70,000; a policy rider on Bimm Ridder’s business insurance protected the company’s computers and the company received reimbursement for replacement computers.

With the loss of manufacturing equipment and a facility under water, Bimm Ridder needed a replacement location. For six months after the flood, two unaffiliated manufacturers produced Bimm Ridder’s products—one in western Iowa and one in Indiana. Eleven company staff members resumed business in Gary’s household basement. Customers and suppliers also offered to help. 

“You have to make quick decisions, even when you’re shell-shocked,” said Gary. “Many people stepped up to help. Otherwise, we would not have made it.” 

Only about 11% of Cedar Rapids businesses had flood insurance before the 2008 flood. If a fire or a tornado strikes a business, insurance will help. But flooding is not covered without the extra layer of flood insurance protection. 

A committee of Cedar Rapids business owners was formed after the flood because they saw how destructive the event had been to area companies and how much of a struggle they were facing to be able to survive. The committee not only set up a mutual support system to share the things others needed to start their business recovery (example: a truck to haul away debris), but they also got involved in business recovery policy advocacy at the local, state, and federal levels of government. 

“We got together and said flooded businesses would help flooded businesses,” said Gary. “Flooded homeowners got FEMA checks pretty quickly. But there was no form of upfront business assistance for us, and we had 13,000 jobs at risk if our companies didn’t make it through.” 

At the first committee meeting, 500 people showed up. The number of jobs the committee was trying to save was twice as many as Cedar Rapids’ largest employer. 

“It makes headlines when the jobs at the largest employer are at risk,” said Gary. 

That’s when people at all levels of policy making and decision making started to understand the full effect the flood had on the community’s businesses. Ultimately, the committee became housed under the Cedar Rapids Chamber of Commerce and continued its work.

While slow-moving (about five years) and frustrating (decision-making in private companies and governments is inherently different), an $84 million business aid package came together. Not all of the Cedar Rapid businesses were able to hold out for the assistance to arrive and some had to close. The Department of Labor had estimated that 55% of the businesses that flooded in Cedar Rapids would be closed in three years; however, only 20% had closed.

Gary continues to speak to other business communities that are affected by disasters to share the lessons and experiences from Cedar Rapids. Programs in other communities to assist business disaster recovery have been modeled after the experiences in Cedar Rapids. 

“That’s our legacy. We built programs that were never in existence before,” said Gary.

Gary is quick to note that local and state elected leaders were significant partners in the business committee’s work. “From the governor to the mayor, we had a lot of the right people at the right time to get through something like this.” 

Helpful Business Disaster Insights from Three Cedar Rapidians Who Experienced the 2008 Flood

Gary Ficken, President, Bimm Ridder

“Go through the process of creating a business continuity plan. If you do, you will address what happens in case of a fire, a flood, an electronic disaster (like a data breach or data loss), and more. Ask questions such as: How do we turn the gas and water off? Who will protect the server? Is the server backed up in a location that’s not in our community? What does my insurance policy cover?” (Editor’s Note: Use the U.S. Chamber Foundation’s Resilience in a Box toolkit to begin a small-business continuity plan.)

“Have a survival kit. The federal agencies will need the three past years of tax returns to evaluate your government assistance package. Make sure you have those, your insurance plans, your business identification information, and your contact list for employees, suppliers, and customers. In Cedar Rapids in 2008, not even a bank box was fail-proof to house this survival kit because the banks were flooded, too.”

“Business owners have to make tough, non-emotional decisions after a disaster. They have to think about what kind of financial shape they were in before the disaster. Because, after, they’ll be in worse financial shape. The first big decision to make is deciding whether a business really can come back or if they’re digging a deeper hole than they can get out of.”

Linda Langston, former Linn County (Iowa) Public Official; Current Director of Strategic Relations at the National Association of Counties 

“We have a nuclear power plant so we drill a lot more than other communities. We had good camaraderie and relationships already developed. We had a good base of social capital.
With the 2008 flood, we blew through four contingency plans within 20 minutes. The redundancy that we built into our systems failed. The flood was that epic. Sometimes your weakest point is the thing you don’t even think about. Sometimes an unwillingness to think about the future gets in the way. You have to think creatively to envision the worst and then plan for it. Communities and systems have weak points everywhere. Use all the tools you have available to help create an understanding of what could happen.”

“Some, but not all communities, do a good job of making sure there’s a chamber of commerce representative in the emergency operations center. That can be one of the huge values of being a member of a local chamber—their business members become more informed than what is shown on the news. 

“Your ability to recover from a disaster is based on the whole of the community.”  

Ron Corbett, former Cedar Rapids Mayor, 2010 - 2017; current business retention and expansion specialist for Cedar Rapids Metro Economic Alliance

“Often, governments have programs in place that are based on other events. Government isn’t necessarily equipped to create a new program overnight. A very organic idea came out of Cedar Rapids elected officials responding to the flood. Business owners would say, ‘we need help’ and local government said, ‘we’ll try, what do you need?’ And the business community came forward and said what would help them.”

“Having money immediately is one thing. Having a plan for money to come in six or 18 months later gives businesses a runway to go look for financing. If every corner they turned was ‘no, we don’t have a program for that,’ people would have lost heart and many more businesses would have closed down.” 

“The 2008 flood brought the community together. We’re stronger today than before the flood and there’s a sense of pride in rebounding.”