Profiting from Disaster: How to Ethically Make Money During
Times of Crisis
By Maurice Ramirez
disaster strikes—whether it be a hurricane, earthquake, flood,
terrorist attack, or some other devastating event—many businesses
are eager to volunteer and assist those in need. Unfortunately, the
resources that are brought in on a volunteer and donation basis
typically run out much sooner than expected. And very often, those
businesses who gladly gave their time and resources to those in need
feel guilty charging for additional services, so they pack up and
leave the area, proud of their good deed, yet leaving those in the
disaster area with few recovery options.
example of this is what happened in Port Charlotte, Florida after
hurricane Charley. Initially after the hurricane, a large number of
contractors went to the area, donating services, supplies, and other
things needed to rebuild the community. The funny thing is that the
residents of Port Charlotte didn’t want the contractors to leave and
would have paid the contractors their normal rate to stay and finish
the disaster recovery efforts. But the contractors—those who were
there on a volunteer basis—felt guilty taking money from disaster
victims. Now, two years later, many Port Charlotte residents are
still seeking reputable contractors to help them. It’s an
unfortunate situation that doesn’t have to happen.
that mean it’s possible to profit from a disaster situation and not
feel guilty? Yes! And those businesses that are able to come into a
community after a disaster strikes and offer a needed product or
service can profit handsomely…and ethically.
Ways to Profits: When it comes to profiting from disaster, most
people think of price gouging or profiteering. Price gouging is not
only immoral and unethical, but in every state and every territory,
it’s also illegal. It’s a criminal act in which you’re taking
advantage of people who have no choice but to pay. When hurricane
Katrina hit New Orleans, examples were heard of unscrupulous store
owners selling generators (that normally retailed for a few hundred
dollars) for two and three thousand dollars. Such people are not
seeking to profit from disaster; they’re seeking to profit from
greed. There are essentially three ethical ways to make money
after a disaster.
Volunteer and Donation. In this scenario you volunteer your time
and donate your products or services. You cover all your own costs
and accept nothing in return, other than perhaps food and lodging.
In return for your time and materials, you get the warm fuzzy
feeling of doing something good for the community. You become an
everyday hero. If you’re visible during this time, you also get
great publicity, which could lead to business down the road from
those who remember your good deed.
Discounted Services. This is the most common scenario, and just
as the name implies, it means that you offer your products and/or
services to the community at a discounted rate. Realize, though,
that no one in the community asked for the discount (although none
will turn the discount down either). Often, the business owner gives
the discount because he or she has some level of altruism and is
willing to make the self sacrifice.
Full Price. In this scenario, you come into the community and
bid a fair market price for a product or service, roughly equivalent
to what other companies would charge during non-disaster times. And
because it’s fair market price, people are more than happy to pay
it. This is completely moral and ethical. Unfortunately, few
businesses make the transition to full fare after starting out as a
volunteer. But if you really want to grow your business and profit
from disaster, this is the way to go.
Free to Fee: So how does a business make the transition from a
volunteer to a paid consultant or contractor? Here are some
upfront. State how long you can offer your products or services
for free. Explain that your company can only afford to volunteer
for two weeks. Very often, at that point, they’ll ask you to bid
the remainder of the work. Then you can offer a fair market bid.
If you get a “yes,” then why would you not stay? You’re already
there, and now you’re making money. If they say “no,” then
they’re taking responsibility for their own recovery. At that
point, you can go home and tend to your business, knowing that
you’ve done a good deed.
When your community does its disaster relief plans (before a
disaster hits), put your company on the list of businesses
available to aid in the recovery efforts. Businesses can work
with their local communities to be “first-called” in the event
that a disaster strikes. In some cases, a business (let’s say a
hospital, for example) may contract with a service provider
(such as a roofing contractor) and pay a retainer fee so that in
the event of a disaster, that contractor will put the hospital
at the front of the list. In return, that contractor gets the
bid for the other work the hospital needs done. The contractor
is happy to give that deal because it guarantees them business.
This is completely ethical. In fact, it’s a win-win solution.
The business gets the repairs they need done and contractor has
bottom line is that businesses need to understand the different ways
they can help, and they need to get over the stigma of profiting
from disaster. Realize that the people receiving your products or
services don’t mind paying for them. So take full advantage of this
profitable market segment. By doing so, you’ll be helping people in
need while helping your own business grow.
Read other articles and learn more about
Dr. Maurice Ramirez.
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