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Can I Sell You an Underground Bunker?

Aug. 7 (Bloomberg BusinessWeek) -- When CBS broadcast fictional reports that an invading army of Martians was slaughtering thousands in the streets of New York, listeners across the country panicked. “New York destroyed; it’s the end of the world,” the New York Times quoted (paywall) an Indianapolis woman screaming as she ran into a church. “You might as well go home to die. I just heard it on the radio.” Orson Welles incited this chaos 74 years ago, when he performed an adaptation of H.G. Wells’s novel The War of the Worlds over the air.

These days, a radio show about the end of the world airs on weekend nights from a bunker in Dallas. But instead of pretending aliens are invading, its host, Scott Bales, 42, tells his audience what to do if this or other catastrophes—such as a large meteor hitting the planet, nuclear war, or a dollar crash—actually happen.

Bales is a prepper, shorthand for someone who devotes time and money preparing to survive cataclysmic events. He’s also an entrepreneur capitalizing on preppers’ fears. His 64-person company, Deep Earth Bunker, builds fortified shelters. Fees for a simple bunker start around $50,000 and climb above $10 million and Bales says he’s sold more than 1,400 to “hard-core preppers who are either rich or [they're] poor and save their money.” Two reality shows that made debuts earlier this year have helped his business: National Geographic Channel’s Doomsday Preppers and Discovery Channel’s Doomsday Bunkers , which featured Bales on each of its episodes this spring, sparking nearly 16,000 requests.

Extreme weather, economic uncertainty, and national security concerns are prompting a surge of entrepreneurs to market to Americans preparing for the worst. Today “there are roughly 3 million preppers in the U.S.,” says Mathew Gross, author of The Last Myth: What the Rise of Apocalyptic Thinking Tells Us About America (Prometheus Books, March 2012). Over the last five years, the number of survival-oriented businesses—particularly those dealing with food storage and wilderness survival gear—“have increased by hundreds of percentage points,” to hundreds of enterprises, says Doug Ritter, chairman of the Equipped to Survive Foundation, a Gilbert (Ariz.)-based nonprofit. “And there’s every indication that they will keep growing.”

Shea Degan, 44, is a former sheriff who recently bought one of Bales’s bunkers and is using it to train clients at his Omaha survival-skills center, 88 Tactical. Degan charges $450 for a two-day self-defense class featuring combat lessons, gun handling, and other basics. For $6,000, clients get a five-day session in which Degan and his 22-person team create realistic worst-case scenarios for participants. He’s planning to start franchising the centers next month, and he expects to triple clients to 4,500 by year-end. “We get people from all walks of life,” Degan says. “For a 24-hour class we had a radio DJ, a neurosurgeon, a physician, and a group of businessmen.”

Not all businesses that serve preppers planned on marketing to preppers. Don Kubley, 57, who owns InterShelter, a Juneau (Alaska)-based manufacturer of portable shelters, intended to sell to government buyers seeking housing for the homeless; he says preppers have been spending thousands for his domes, the smallest of which (at 14 feet in diameter) costs $6,500. They can be sprayed with his bulletproof and bombproof coating, Dragonshield. “It takes three things to survive: food, water, and shelter,” Kubley says. “And we are one-third of that formula.”

Is that really all it takes? Andrea Burke, an art teacher and holistic health coach in western Montana who runs dating site Survivalist Singles, thinks companionship is a crucial element. The free site isn’t making money yet but Burke, 45, plans to start charging its 3,800 users a $5 monthly membership fee this fall. The site uses the tagline “Don’t face the future alone,” but Burke may change it to “Find love for less than the cost of a box of bullets” once the fee is in place. “Less than the cost of a latte doesn’t really work with this crowd,” Burke explains. “Maybe less than an MRE.”

Bales isn’t limiting his marketing to his radio show or his role on Doomsday Bunkers . This spring he launched his own production company, Pyramid Films, to record bunker installations and use the footage to create his own show if he doesn’t get featured on a further reality series. (He’s in talks with some, he says.) Bales could also apply to National Geographic’s Doomsday Preppers , which has been tweeting casting calls for its second season.

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