Case Study
What would you do with this business?
Peter Wynn Thompson
for The New York TimesBeth Heller, right, and Tamara Quinn.
Last week, we published a case study about two disaster-frazzled entrepreneurs seemingly in need of some of the calming supplemental holistic health services — yoga and massage — that they offer at Pulling Down the Moon, a Chicago business that was hit by two floods within a year.
Because the entrepreneurs, Beth Heller and Tamara Quinn, linked their yoga business to referrals from Fertility Centers of Illinois, from which they subleased quarters in a rented building on the Chicago River, they temporarily relocated their business while the similarly displaced fertility clinic reconfigured and rebuilt the first floor offices after the July 2010 flood. This past July, the water damage from the second flood was not as severe. The company was able to stay open during the repairs, which required cutting out the bottom foot of some walls and bringing in industrial blowers. Because of delays with insurance assessments and payment approvals, the restoration dragged on until mid-October.
“It was noisy,” admits Ms. Heller. “But we have great clientele. We put headphones on our clients while they were receiving treatment, and we turned the fans down to a lower level during work hours, and then, when the last patient left, we turned everything up and blasted the blowers all night long.”
As one would expect, considering the varied opinions and advice from both the outside observers we tapped and the comments posted on this blog, the decision to stay on in an uncertain location was not easy for Ms. Heller and Ms. Quinn. In a follow-up interview, they explained their decision to stay, shared some recent developments with their insurance coverage and talked about what they would do if there were yet another flood.
Q: Did you survey your customers and employees to learn their feelings on being dislocated and inconvenienced by your floods?
Ms. Quinn: We did an informal survey at checkout when we were in our temporary location. We asked: How did you find the experience and location? What we should have done is like a SurveyMonkey, something a little more anonymous, because I’d say 80 percent of our patients put a very nice smile on their face and said, “Oh, you guys are so nice here.” A sort of attaboy pat on the back. I’m not certain we got many straight answers. I do remember a couple of clients saying the temporary location didn’t work, that it was noisy and felt incomplete. So I do think we lost some clients, but I also think those who stayed were committed to us on a lot of different levels.
Q: Is it clear what caused the building to flood in those two storms?
Ms. Heller: We don’t know for sure. That first flood flowed with Chicago gossip as to whether the Chicago River locks were open and whether the city failed. The second time it clearly wasn’t an issue with the locks. It was a smaller event. In the first flood we had both backup through the sewers and overage from the river itself. The second time it was just backup.
Q: So who is at fault when the sewers back up? The city? The building? What did the insurance company conclude?
Ms. Quinn: We don’t know. The insurance company never gave us a report as to their findings of who is at fault. If you ask the building management, they say it’s the responsibility of the tenant. Our assumption is that our landlord installed backflow preventers to keep this from happening again, but we’re not 100 percent sure that that has been completed. The other intriguing element to the story is that the building has sold and it’s now under new ownership. It makes getting a lot of answers more challenging.
Q: It sounds like there continues to be some uncertainty.
Ms. Quinn: There is some uncertainty. When Beth and I tried to renew our insurance, we were denied. Our insurance was dropped. Our insurance broker said this had nothing to do with our two losses but because we were becoming more like a bona fide medical facility because we were going into areas like nutritional supplementation, which is a field that scares some insurers, I guess.
Q: Do you have liability insurance and flood insurance at the moment?
Ms. Quinn: We do, but we had to put our entire account up for review and go to the open market. And we’re paying more than twice as much now, up from around $10,000 a year to about $24,000 a year.
Q: You’re insured, but there’s no guarantee, of course, that you won’t have another flood next July.
Ms. Heller: Believe me, Tami and I are going to have our toes, fingers and eyes crossed for the entire rainy season in Chicago. Honestly, Tami, every time it rains don’t you think, Oh, dear God, what’s happening at the river?
Q: Two to one, those we asked to comment on your dilemma effectively counseled you to move to higher ground, saying the stress of staying in a location plagued by uncertainty outweighs even the significant advantages of being down the hall from the main source of your business.
Ms. Heller and Ms. Quinn (in unison): That’s so interesting.
Q: Even with the advantages of being down the hall from the fertility doctors, is the karma really right at this site for an enterprise built upon such healing arts as yoga and massage?
Ms. Quinn: Because our mission is to integrate holistic medicine with traditional Western medicine, we don’t want to be separated. So we’re willing to take the risk of another flood to accomplish that mission, of having a Western medical doctor on one end of the hall and a holistic practitioner on the other end of the hall who talk to each other, and patients who treat all aspects of their person — mind, body and spirit.
Q: Are you watching to see if office space suitable for you and the fertility clinic opens on the second or third floor of your building?
Ms. Quinn: We’ve asked a couple of times: “So, docs, when are you thinking you might want to move and how much longer do you have on this lease?” But we have a really nice relationship with them, and we also have a lot of faith that they’re smart people and they know what they’re doing. If they’re putting their business on the line with some uncertainty, we feel that we can take that same chance.
Q: So if you suffer another flood, you would suck it up and stay where you are?
Ms. Quinn: If we ever had to temporarily relocate again, we would break our lease and say sayonara. I think if it happened a third time, and the doctors didn’t want to move, we’d have to go on our own because at that point we’d just be stupid.
Ms. Heller: But I don’t think the doctors would do another rebuild. If there was another big flood, I think we’d all be moving to Michigan Avenue together.
Article source: http://feeds.nytimes.com/click.phdo?i=96effb6901bb10fb5d41d6865ae351a2
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