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Only 1-in-4 small businesses has a disaster plan: ASBFEO

Natural disasters can be devastating for small and family businesses yet only one in four small businesses has a current business continuity plan, according to Australian Small Business and Family Enterprise Ombudsman Bruce Billson.

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     Photo courtesy Steve Huntley, The Riverine Herald*

“In the aftermath of natural disasters, we typically see massive and heartbreaking clean-up efforts, a lengthy and hard-going recovery, questions asked about how small and family businesses and the communities they are a part of and service will bounce back and what, if anything, could have been done to better prepare,” Billson said.

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       "Preparation is key":
       Bill Billson, ASBFEO
 

Last year the Ombudsman conducted an inquiry at the request of the Australian Government after the rolling disasters of bushfires, drought and floods and the COVID-19 pandemic. The Ombudsman visited 36 communities across Australia to directly hear from small and family businesses impacted by natural disasters. In addition, an online survey attracted more than 2000 respondents.

“It is clear from our work that preparation is key to small and family businesses building resilience and coming through natural disasters in the best possible shape,” Billson said. “It is equally clear that small and family business owners cannot do this on their own and require clarity and certainty of the support available.

“As a country we put an enormous amount of effort and resources into the clean-up. Some 97% of money spent by governments on disasters is after the event and only 3% is on preparedness,” Billson said.

Among the recommendations and findings, the report says:

There should be a “certainty of response” for small business owners, so they are automatically elevated and front of mind in disaster response, recovery and funding arrangements - including indirectly affected businesses.

A “tell-us-once” triage system should be adopted to save small business owners the trauma and time associated with repeating their story.

An opt-in “My Business Record” should be created to allow a small business to digitally store all relevant government-held and other vital information it might need after a disaster.

A Government subsidy should be available when workers in a small business are called out for volunteer work for an extended period or a business is required to scale back operations because of volunteer activities.

In many cases small business owners are operating uninsured, underinsured, or with excesses payable that prohibit them making a claim, due to extreme difficulty in accessing affordable insurance. In some communities, insurance is simply not available. More must be done to address this complex market dysfunction.

Numerous examples of inequity or inconsistency of support created a sense of resentment that some businesses that purchased expensive insurance and had a disaster plan were denied support while others that gave far less attention, time, and effort to protect their own economic interests were helped.

Billson said the experiences of many hundreds of small and family businesses showed having a plan will help them be more able to bounce back after a natural disaster.

“As we have sadly seen too often, natural disasters can cause lasting harm to our enterprising women and men, Simple steps to be ready include ensuring record keeping is up to date, business processes and critical information are, where possible, digitised, and payments to relevant bodies such as the ATO, lenders, and insurers are up to date.”

The Small Business Natural Disaster Preparedness and Resilience Inquiry report is available at www.asbfeo.gov.au where there are also checklists and resources to help small business prepare for a disaster and, if needed, to recover after one.

* Digital printer Revolution Print last month joined with Ball & Doggett and Konica Minolta Australia to launch a Flood Fundraiser 2023 calendar to support front-line community groups helping victims of the devastating recent floods across Echuca and Rochester in northern Victoria.