'Loretta's' New Orleans pralines back in business

As she mixes up a batch of pralines in her kitchen, Loretta Harrison explains how her food business, Loretta's, has had to reinvent itself in the year since Katrina – thanks to quick help from the private sector.

"We had no money coming in so we had no money for supplies," she tells visitors to her kitchen. "And all our old customers were not here, and the tourists who normally buy my pralines were not here." Getting money from her insurance company and the Small Business Administration (SBA) was taking forever, she says. So, she asked the Idea Village, a small-business incubator, for help. The private sector, she quickly found, arrived with a $2,500 grant so she could buy shipping supplies for Christmas. But they also had advice: Start expanding the business and sell to hotels and retailers and online.

"We view ourselves as just a piece of the relief program," says Tim Williamson, president of Idea Village. "In some cases, we were all some people needed, a grant and advice."

Idea Village is an example of how quickly the private sector can react to an emergency. And with its stable of MBAs and home-grown entrepreneurs, it can provide strategy as well as money. "They are attempting to identify those businesses with a chance to break through and create significant jobs if they have the tools and the access to capital," says John Elstrott, a professor of entrepreneurship at Tulane University.

In the weeks after Katrina, the odds of survival for a small business were slim. Almost every business in Orleans Parish – some 18,000 – was closed for six weeks. More than half have not reopened.

After the storm, Idea Village used $100,000 in state seed money to raise more than $700,000 from private sources. One donor gave $20,000 for 10 female entrepreneurs.

Many have used the business incubator to reinvent themselves. Barbara Ann Locklear, publisher of Weddings Noir New Orleans, saw business falter when a wall in her building collapsed. The organization offered her space and gave her $1,000, which she used to buy a printer. She changed her magazine's focus because New Orleans, predominately an African-American city before Katrina, has a different ethnic mix poststorm. "Now, we are multicultural, celebrating weddings for Asians, Hispanics, and other ethnic groups," says Ms. Locklear.

The private-sector grants helped some of the companies hang on until their SBA loans came through. That's the case with Ms. Harrison, who ultimately landed an SBA loan. After her experience, she has a tip for the government: "They need to give money in a timely fashion."