Natural catastrophes can be terrible for small and family businesses, but according to a report by the Australian Small Business and Family Enterprise Ombudsman, just one in every four small businesses today has a business continuity strategy.
The Small Business Natural Disaster Preparedness and Resilience Inquiry report, which was presented to the Federal Parliament today, discovered that by taking reasonable risk mitigation measures, being better prepared, and building resilience, small and family businesses can recover more quickly from the effects of a natural disaster.
According to the report, all levels of government and the business community must collaborate to ensure that small and family-owned business owners have access to the information and tools they require to manage risks. Noting that 97 per cent of government catastrophe spending is spent after the occurrence, with only 3 per cent spent on preparedness, it highlights the critical role local government can and does play in providing place-based advice and support to build small business resilience.
The study found that having a strong sense of community connectedness, including collegiate business relationships, or “socio-commercial capital,” makes communities more resilient and cohesive, allowing them to work to both prevent and respond to natural disasters.
“In the aftermath of natural disasters, we typically see massive and heartbreaking clean-up efforts, a lengthy and hard-going recovery and questions asked about how small and family businesses, and communities will bounce back and what, if anything, could have been done to better prepare,” Ombudsman Bruce Billson said.
“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. 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.”
Mr Billson added that 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.
“Natural disasters can cause lasting harm to the enterprising women and men building businesses, employing local community members, and contributing to the Australian economy,” he said.
“Small business creates vitality in our communities, employs two out of every five people with a private sector job and contributes one-third of our GDP, so it is absolutely worth building its resilience.
“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.”
Mr Billson paid tribute to the countless selfless and committed individuals and community agencies and advocates playing a vital role in supporting small and family businesses in the immediate period following a natural disaster and in supporting the long and challenging road many faced.