The US Department of Labor estimates that forty percent (40%) of businesses never reopen after experiencing a disaster. Twenty five percent (25%) of surviving businesses will lose their market and shut down within two (2) years of a calamity. Savvy entrepreneurs understand that insurance policies are not meant to hedge these serious odds. Do you?

The New York Times posted an interesting case study in their Small Business Section, A Business Ponders Whether Its Location Is Perfect, or a Disaster.

Pulling Down the Moon provides holistic services to women undergoing fertility treatments like yoga, acupuncture and nutritional counseling. I have to disagree with John Keynes, women from Venus have been hard wired to get what we want, when we want it, no matter what. Women drive the US economy and if you give us more money, we will save the world’s financial crisis one card swipe at a time. Pulling Down the Moon understands this paradigm and runs three successful locations with 35 employees and earns $1.3 million in annual revenue catering to women that want babies now, not when the economy recovers.

In 2010, heavy rains brought about an inch of water into Pulling Down the Moon’s main location in Chicago, which is conveniently nestled next to one of the country’s biggest fertility clinics. The yogis were at the ready with their mops and aromatherapy, but the building’s drains and sewers failed, bringing in a deluge of Chicago River water into the studio. The yogis’ landlord (the major fertility clinic) did not have a good disaster response plan and the restoration work took months as the yogis struggled to service their determined customers at a different locale. The yogis rebuilt and resumed operations at their original location 4 months after the flood. A business-interruption rider paid for the move to temporary quarters and reimbursed the ailing company month by month for lost revenue as patient visits dropped by as much as 30 percent.

Happy ending? No. Seven months later, another downpour flooded the yogis studio, but didn’t cause as much damage so they were able to resume operations quickly. Should the yogis stay? Should they go? The results of the NY Times’ case study will be posted this week as we all ponder the issue.

Some experts have weighed in:

Ken Barnett, chief executive of MARS Advertising, a marketing agency based in Southfield, Mich., that lost everything in its 50,000-square-foot headquarters to a 2004 fire: “The karma may be great along the river, the space may be perfect, but the fact is there are enough things in business that you cannot plan for. Why burden yourself with the uncertainty, lying in bed on a stormy night, that your business may not survive?”

Donna Childs, author of a book about disaster preparedness: “The answer to the question of should they move to a new location is to be found in the mission of the business, providing stress-reducing yoga to aid fertility. Disruptions are stressful.”

John Glenn, Enterprise Risk Management (Miami) says : “Even the best business continuity plan won’t save an organization teetering on failure before an event.

Should the yogis move? Should they keep relying on poor landlord response and spend hard earned cash while they wait for insurance to pay every time it rains hard and they lose market advantage? We’ll see what the yogis decide next week.