THE terrible floods and storms that have caused major trauma in parts of the country in recent months should be a red alert for small businesses to be prepared for natural disasters, warns Australia’s Small and Family Business Ombudsman, Bruce Billson.
Billson said the vast majority of small and family-owned businesses do not have a current disaster preparedness plan for their businesses.
“An investigation by my office found that only one in four small businesses has a business continuity plan in place,” the Ombudsman said.
“Natural disasters can be devastating for small and family-owned businesses: either their business is directly damaged or wiped out, or they are an indirect victim who has survived the disaster and has no customers due to the impact on their city or region.
“Taking simple steps to be better prepared, adopt sensible risk mitigation measures, and build resilience can help small and family-owned businesses recover more quickly.”
Billson said that in some cases, when a disaster was imminent, small business owners were often the first to volunteer to lead and contribute to local emergency response and business support groups, and to help make preparations. for the community, such as placing sandbags and moving material and people to higher, safer ground.
“Like the businesses they run, they are the lifeblood of our communities,” he said.
“But I urge small and family businesses to be as prepared as possible and in the best position to respond and recover. This can be as simple as making sure your records are up to date and that critical information is on hand and, where possible, digitized so you can recover it if your business is destroyed.”
Billson said small businesses could take the following steps:
Do you have the contact details of your clients, suppliers, staff, accountant and other important people in a safe place?
Do you have copies of relevant accounts, passwords and backups of important operational data?
Would it be feasible to continue operating from another location?
Are your payments to relevant bodies such as insurers, lenders and the Tax Office up to date?
The Ombudsman’s Small Business Natural Disaster Preparedness and Resilience Inquiry recommended the creation of a ‘My Business Register’ option to allow a small business to digitally store all relevant information held by the government and other vital information it may need after a disaster.
“It’s clear from our work that preparedness is key for small and family businesses to build resilience and weather natural disasters in the best way possible,” Billson said.
“It is equally clear that the small business community cannot do this alone and when a natural disaster occurs, certainty of response and certainty of support must be provided.
“By this we mean that small business owners should automatically participate in local planning and support services and be prominent and ‘top of mind’ in disaster response, recovery and financing arrangements. This must include indirectly affected companies.
“We believe that a business center should be established to provide a single point from which to seek help from government and non-government agencies. And we strongly recommend that a ‘tell us once’ triage system be adopted to save small business owners the trauma and time associated with repeating their story.”
Billson said ongoing support should also continue after a disaster.
“When a small business receives a grant from the Australian Government, an additional amount must be made available six to nine months later for a ‘business health check’,” he said.
“We also need an integrated disaster risk management response for identified disaster-prone areas that incorporates priority access to mitigation spending, coordinated planning across levels of government, strengthening infrastructure, interest-free loans for protection of assets and activities and relocation schemes, and possible use of a dedicated reinsurance vehicle.”
Billson said an ongoing problem was that many small businesses were unable to obtain adequate insurance at an affordable price.
“If they can get insurance, this can lead to excesses that would prevent any claims from being filed,” he said.