How Small Businesses Are Faring in the Aftermath of Hurricane Helene

Introduction

In the year plus since Hurricane Helene made landfall that left a path of devastation across the southeast, Western North Carolina (WNC) communities have made substantial progress in recovery. However, the lasting impact of the storm is still a daily reality for the many households and businesses that suffered substantial physical and economic losses. For the small business community, the degree of losses varied widely. For some, the storm completely destroyed physical structures, which led to permanent or temporary closures. Others experienced minimal disruptions but faced a declining customer base and significant revenue losses.

Small businesses are central to the character and identity of many WNC communities, and compared to other regions in North Carolina, they play an outsized role in the health of local economies. As such, small business recovery is critical to economic resilience in the aftermath of Hurricane Helene.

Over the past year, outreach in the WNC region has been vital to the Richmond Fed's understanding of the storm's impact. The Asheville Area Chamber of Commerce is a key partner who has informed our understanding of how businesses have been affected both through anecdotal information and survey data provided through their research division, Riverbird Research. With results from the latest iteration (fall 2025) of Riverbird Research's Western North Carolina Hurricane Helene Business Feedback Survey, we find that while recovery gained momentum over the last year, businesses face ongoing challenges.

Exploring the Small Business Landscape of Western North Carolina

According to estimates from the 2023 County Business Patterns data, an overwhelming majority (99 percent) of businesses in WNC and the United States as a whole are classified as small businesses (i.e., they are enterprises with fewer than 500 employees). However, most of these small businesses have fewer than five paid employees, many of which operate as sole proprietorships. These businesses, commonly referred to as microenterprises, are major contributors to local communities by providing products and services, employment opportunities and income. In WNC, microenterprises are more prevalent compared to other regions in the state: Approximately 75 percent of all businesses have fewer than 10 employees, and 57 percent have fewer than five employees - a slightly higher share when compared to North Carolina and United States averages. (See chart below.)

The concentration varies by county. (See chart below.) Microenterprises are more prevalent in the southwest and northwest in counties like Cherokee, Graham, Clay, Yancy, Ashe, and Madison, most of which are rural.

The data reveal that there are some areas of the WNC region where the business landscape is more exposed to some of the challenges that many smaller businesses face, such as difficulty accessing credit, thinner margins, less bargaining power, fewer resources, and higher risk of failure - all of which can make them more vulnerable to the impact of natural disasters. This also applies to small businesses in WNC that were not directly impacted by the storm. For example, a 2024 Richmond Fed business survey report showed that in the aftermath of Helene, businesses in non-FEMA designated areas reported business impacts including supply chain disruptions, loss of business, and staffing challenges - all of which can be even more detrimental for smaller firms.

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Understanding the Impact of the Storm One Year Later With Riverbird Research's Survey Data

Riverbird Research of the Asheville Area Chamber of Commerce, the City of Asheville, Buncombe County, Land of Sky Regional Council, Explore Asheville, and Economic Development Partnership of North Carolina coordinated efforts on a Business Feedback Survey from spring and fall 2025 to capture the evolving status, needs, and recovery progress of businesses across the region and to help provide insights for recovery planning.

Although the survey was not designed to be statistically representative of the full business community, the responses provide valuable, real-time feedback from participating businesses. In the fall 2025 survey, a vast majority of the 437 respondents were small businesses: Eighty-four percent have 25 or fewer employees; 58 percent have five or fewer employees; and 24 percent were sole proprietorships. Below summarizes notable insights from the survey.

Businesses Reliant on Visitor Traffic Reported Declines in Employment and Hours

One year after Hurricane Helene, about two-thirds of respondents in the fall 2025 survey reported maintaining staffing levels. However, reductions in staff or hours were noted across nearly all industries except government, with the highest occurrences generally among those more reliant on outside visitors such as accommodations, restaurants and food services, and outdoor recreation. Respondent businesses in the arts and entertainment industry also showed relatively high visitor reliance but mostly stable staffing, possibly reflecting the fact that many were one-person or very small businesses. In contrast, industries less dependent on visitors such as professional and business services, construction, and educational services, had more stable employment levels and hours. Very few businesses reported increases in staff or staff hours post-Helene.

Among businesses that reduced staff, the top reasons - if operating below breakeven - were reduced customer demand, financial strain, and damage to land or buildings. Workforce shortages were also mentioned in some cases, which wouldn't necessarily be tied to the hurricane alone, but were likely compounded by the storm's disruption.

Unresolved Property Damage Remains for a Subset of Businesses

Nearly half of respondents reported no property damage from Hurricane Helene, and another 30 percent reported that any damage had been fully addressed. The remaining 91 businesses (21 percent) indicated that damage had not yet been fully repaired. Unresolved damage was reported across all industries except government. One respondent underscored the difficulty in finding companies to perform repair work.

Businesses Report Financial Support and Increased Consumer Demand as Top Recovery Needs

When asked whether recovery support was still needed to stabilize or fully recover from the impacts of Hurricane Helene, 53 percent of respondents said yes, representing businesses across all industries¹. Financial support was the most frequently cited need, followed by increased customer demand - mirroring results from the first survey and reflecting the continued importance of both. The third most common need was repairing or rebuilding property, including buildings, equipment, and inventory, which also closely mirrored the first survey.

Profitability Is a Concern, Especially for Leisure and Hospitality Businesses

Responses indicated that one year after the storm, only 28 percent of businesses in this participant group were operating profitably or above breakeven. Another 30 percent reported breaking even, while 30 percent remained below breakeven or operating at a loss. An additional 5 percent were temporarily closed due to the storm's impacts, and 3 percent reported permanent closure. These results indicate that recovery is still ongoing for most businesses in this respondent pool. Among those operating below breakeven or temporarily closed, the top reasons have remained consistent between surveys: reduced customer demand, financial strain or cash flow challenges, and damage to land or buildings. Despite these challenges, 67 percent reported not being at risk of closure at the one-year mark. However, leisure and hospitality businesses - those in the arts/entertainment and restaurants/food services sectors - reported being most at risk.

From the survey results, we see how the industry composition of WNC small businesses plays a role in the severity of the storm's impact. With a notable tourism presence, WNC has a higher concentration of retail trade, accommodation and food services, and arts and entertainment businesses, while the concentration of professional and business services, finance, and transportation businesses is lower compared to North Carolina averages. (See chart below.) Even for businesses that may not have been directly impacted by the storm, for those that rely on visitors, the decline in visitors to the area had a significant negative impact on consumer demand for businesses directly and indirectly tied to the sector.

Views expressed are those of the author(s) and do not necessarily reflect those of the Federal Reserve Bank of Richmond or the Federal Reserve System.