Natural disasters can be devastating for small and family businesses yet only one in four small businesses have a current business continuity plan, according to the Australian Small Business and Family Enterprise Ombudsman, Bruce Billson.
"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," Mr Billson said.
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.
The Small Business Natural Disaster Preparedness and Resilience Inquiry report included 16 recommendations.
"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."
The report found that governments at all levels and the business community together have a crucial role to play in ensuring small and family business owners have all the information and support they need to manage risks.
"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," Mr Billson said.
"What became abundantly clear during our inquiry is that a strong sense of community connectedness, including collegiate business relationships - what we have called "socio-commercial capital" - leads to more resilient and unified communities that learn from and support each other to work together to prepare for, and respond to, natural disasters."
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.
- There should be "certainty of support" by establishing a business hub after a disaster as a single point to seek help from federal, state, and local government and non-government agencies to provide support.
- 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.
- Infrastructure grants should be provided to ensure critical infrastructure relied upon during a disaster is fit-for-purpose, remains intact and functioning.
- The Australian Government should implement a "good neighbour" program and mitigate risks on land it owns.
- 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.
- When a small business receives an Australian Government grant, an additional amount should be made available six to nine months later for a "business health check" and to support any necessary adjustments.
- 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.
- Calls for an integrated response to disaster risk management for identified disaster prone areas that incorporates priority access to mitigation expenditure, co-ordinated planning across levels of government, infrastructure hardening, interest-free loans for asset and activity protection and relocation schemes, and possible use of a dedicated reinsurance vehicle.
- 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.
Mr 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," 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 to support small and family businesses in the immediate period following a natural disaster and in supporting the long and challenging road many faced.
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.
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