Markham, Ont.—The majority of Canadian small business owners are unprepared to deal with disruptions, according to the latest American Express Small Business Monitor.
The company conducted a survey and found nearly half of small business owners are unfamiliar with business continuity planning, which would give them the ability to deal with everyday risks such as illness, flood, fire, power outages, computer viruses and Internet failures.
Even so, two out of every five respondents had already experienced a “significant disruption” to their business, the report found. One Manitoba-based monitor respondent, for example, saw her business shut down completely for six months due to a flood. Nearly half of the group who had experienced disruption said the effects lasted more than a month.
Eighty percent of respondents said continuity planning is lower on their to-do list, or not even on their radar, and almost half (49 percent) don’t have fire and flood insurance. Many cited lack of time as the main reason.
"Small businesses are a vital part of the country’s economy, and given all they have to do, it’s no surprise that they have very little time to invest in issues that don’t translate to growth," said Howard Grosfield, vice-president and general manager, small business services with American Express Canada and International.
"Business owners are laser focused on how to boost sales and profit, particularly during a recession. Business continuity planning, while a vital protection for small businesses, simply isn’t going to make a company money in the short term."
The monitor also revealed that the vast majority of Canadian small business owners have not taken precautions that cost little or no money. A full 75 per cent have yet to talk to their staff about how to handle or avoid a disruption.
One respondent from Quebec admitted that if several members of his team are affected by seasonal flu or H1N1, he can do little more than "try to pick up the slack."
However, respondents noted several areas where they’re being proactive, including:
• Data back-up plan (57 percent);
• Emergency cash reserves (34 percent);
• Back-up power systems (31 percent);
• Catastrophic illness insurance (20 percent).
"There are many quick and inexpensive things business owners can do to shield themselves and for many, this is likely a simple matter of picking the right place to start," Grosfield said.