How does severe weather impact small businesses? And can you manage risks of severe weather? The actual impact of weather on your small business and your energy use will, of course, vary by the type of business you operate. Construction companies are affected differently than restaurants. Yet for any company, weather has a measurable influence on your small business and particularly on your energy consumption.
How does weather affect small businesses?
The obvious thing that comes to mind when thinking about the impact of severe weather on small business energy use is temperature. It’s fair to ask: How does temperature affect energy consumption?
Yet other extreme weather factors, including wind, precipitation, humidity, lightning, and even darkness, will change how much energy your business uses in a severe weather situation. Many weather events increase the load, causing your systems to work longer and harder. The result can be a localized or area-wide blackout, leading to almost no energy use at all.
Buildings use about one third of the world’s primary energy. Power is likely a large budget item for your business. According to the IEA-EBC Annex 53 report, six factors influence energy performance, including building envelope, equipment, operation and maintenance, occupant behavior, interior conditions, and, last but not least, climate. Weather has a substantial impact on business energy consumption.
Elements of your business that are affected by weather
- Energy use. Severe weather can spike energy use as your HVAC struggles to maintain interior temperatures, manage humidity and filter air. Beyond the event itself, it takes power to clean and make repairs in the aftermath.
- Business property. Wind, rain, lightning strikes and flood waters can damage your building, compromising windows and doors and causing ceiling leaks. In addition to the costs, damaged facilities affect energy use and efficiency.
- Employees. If employees are flooded or snowed in and can’t get to work, productivity suffers. In situations when weather strikes during work hours, it can cause anxiety and distraction that affect your bottom line.
- Customers. Weather events can keep customers away. And in other cases, if you’re open, operating and providing a relevant product or service, weather can drive customers to your door.
- Product demand. Weather affects supply, shipping schedules and the cost of goods. On the demand side of the equation, weather can affect what customers need and want and, thus, your prices.
Types of weather that will greatly affect your small business’s energy consumption
Storms, floods and temperature extremes are challenges for your business, disrupting operations, upsetting employees and customers, damaging buildings and equipment, and increasing energy consumption.
High temperatures
Extreme heat makes HVAC systems work harder and longer. The effect is magnified if humidity is a factor. When condensation collects on the coils of your air conditioner, it runs less efficiently and must run longer at a higher intensity.
An energy-efficient air conditioner can make a big difference. Heat pumps are an energy-efficient alternative but don’t function well in extreme heat. Beyond HVAC systems, if your business uses refrigeration, these systems have to work harder when indoor temperatures are higher.
Low temperatures
Low temperatures are just as hard on your business infrastructure and heating system. In cold weather, your furnace or heat pump has to work overtime. Many businesses find they need to use portable space heaters to augment their regular HVAC systems.
Other systems, like water heaters, may need to work harder as well. Not sufficiently heating the interior of your facilities is more than a matter of comfort; pipes can freeze and burst, causing expensive property damage.
Excessive rain and flooding
Rain keeps customers away, and when excessive, can lead to floods and leaks. Heavy rain often comes with wind and lightning, which can down power lines. Floods can affect the availability of power when the water damages power transmission lines or when supply is cut for safety reasons.
Snow and ice
Snowstorms and ice events are multifaceted challenges for businesses. They make it hard for employees to get to work and for customers to patronize your business. Snow and ice snap power lines just when you need electricity most to heat your facilities and protect your water lines from bursting. Most municipalities require you or your landlord to clear walkways and parking areas, making you liable for any mishaps.
Hurricanes
Hurricanes are a major threat to lives and businesses. The extreme damage they do to buildings, roads and other infrastructure cause disruption that lasts far beyond the storm itself.
Businesses that manage to stay open or get up and running quickly often benefit greatly when the need for products and services is high. Conversely, the storm can devastate businesses that are shut for long periods.
Tornadoes
Tornadoes, and the effects of the storms that bring them, damage business property and entire communities. Areas that take a direct hit can suffer anything from damaged roofs to complete destruction.
Power lines, transformers, wind turbines and other renewable energy technologies can be wrecked beyond repair, affecting power availability and costs long term.Your business may not be able to operate until infrastructure repairs are made.
Fire
Fire is a destructive force closely associated with weather events. Lightning can strike your structure, zapping your equipment and starting a blaze. Wildfires, often fueled by drought and/or high winds, can roar through and destroy your business, your suppliers and the homes of employees and customers. If fire misses your facilities, it can take out power generation and transmission infrastructure elsewhere that serves your business.
Acts of God
An “act of God” is an event, usually a natural disaster, that’s outside human control or action. Many of the weather events mentioned, from hail to hurricanes, qualify as acts of God.
The impacts include damage to property, inability of your business to operate and effects on customers and markets. Most acts of God have an energy angle: either the loss of power or highly increased demand for power. Any such event can be devastating to the survival of your business, making it important to manage risks of severe weather.
Establishing a plan for severe weather
Because severe weather can destroy your property and your business prospects, you need both adequate planning and protection. Your plan should be based on the kinds of severe weather that strike your region, and your insurance coverage should address the major risks in a comprehensive way.
Preparing your small business for severe weather
No one can stop the weather, but you can mitigate its negative impacts. Constellation offers some helpful resources, including a small-business disaster recovery plan and an emergency plan for power outage, and we also suggest the emergency planning toolkits at Ready.gov. Further, the following key steps can prepare your small business for severe weather:
- Know your risks. Are you in an area prone to hurricanes? Be ready, too, for tornadoes and floods that come with them. Or you may be in an area that sees regular ice storms. Go beyond your own personal experience of local severe weather and do research — it could be that “100-year” event that gets you.
- Always be vigilant. The sooner you see trouble coming, the better you can prepare.
- Develop a plan. A good plan includes preparation, communication, protecting property, the safety of staff and customers, and safeguarding the future of your business. Your plan should include scenarios for alternatives to stay operating when disaster strikes.
- Protect yourself. Property insurance that includes coverage for specific weather events is a must. Add liability and business continuation coverage to fully protect your business.
- Take action early and be a leader. You will not only protect your business but also contribute to the community, which is both the right thing to do and good for your brand.
How weather impacts a small business largely depends on your planning, how you manage risks of severe weather and the actions you take. There’s no substitute for being aware and ready.