Yet again Victorian business in rural regions are bracing to recover from flood damage.

Its the third time in two years that they have experienced a dispruption such as this. Recently I have been travelling through regional Victoria and spoken to business owners who are still trying to recover over a year later and they express concerns that they cannot see how they will ever fully get back to where they were before. The research shows that over 80% of business never fully recover.

I have also seen first hand that 95% of private business owners do not have what is known as a BCP plan. ( Business Recovery Plan ). And, unfortunately, many still have their head in the sand on this issue which is surprising to me given the floods and bush fires we have had in recent times.

I would recommend that you visit the SES web site and download their documentation on the emergency tool kit and they also have a a book titled Business Floodsafe Toolkit and Plan. If you cannot find it on the web site call them 1300 842 737 and ask for a copy. The kit applies to storms and other disasters.

If a diaster hits your business do you have a check list prepared that covers:

Your family, communications, staff, IT systems, customers, suppliers, cash flow, debtors, creditors, automatic debits from your bank account etc. Do you have a check list that details all your documentation and policy numbers on contracts etc ? If you are seriously injured or actually die, where is your will and who has power of attorney on matter with your personal health and/or the continuation of your business.

It's time to address this issue. You have an obligation to your family, staff and yourself. Also, if you are a legal director of your company , you are not meeting your legal obligations to properly manage your business under the Corporations Act.

 

This photo was taken after last year's flood in Ipswich. If this was your business would you survive and be able to recover ?

The building belongs to the Peter McMahon Swim Factory, a successful swim centre for kids and learners. Back in 1974 Peter's father also operated a successful soft drink company from the same site and it was completed flooded in those at that time as well. It took a long time to recover from that closure in the middle of their peak sales season.

So, this time around Peter knew to prepare and removed all his motors, papers. computers etc out when he saw the signs that a flood was heading his way.

Pre-planning enabled him to recover quickly and be back in business within ten days. The reseach says that 80% never fully recovery from such a disaster.

 Where is your your recovery plan ? Contact us if you want some help in developing a business continuity plan.

On Jan 24th we start a series of workshops to assist business owners on how to start  planning in advance in case they are hit by a natural disaster such as a flood, fire or storm.

We know that 80% of business never fully recover from a natural disaster and planning can greatly help in reducing the impact.

Funded by the Federal Government through Enterprise Connect there are eight workshops being held in Ballarat, Horsham, Mildura, Kerang, Colac, Dunkeld, Warrnambool and Bendigo.

Contact us at billwinter@bigond.com.au for further information

Even in the best of time, companies should have contingency plans for emergencies, disasters, recessions and industry upheavals.

The majority opinion in the Director Nexus Group I chair is that, as a company director, you are negligent if you do not have a contingency plan. This is reinforced in the Corporation Act 2001 with regard to responsibilities and liabilities as directors.
 
Last weekend I spoke at an industry association conference on risk management for private company directors and of all the companies represented in the room, only two indicated that they had a Business Continuity Plan. (BCP). I cannot name one small business I have meet in the last twelve months that has a BCP written down let alone run a simulation.

I see that the Australian Government has just closed tenders for a program to run workshops on this topic across the country for small business as result of the disasters with floods and fires in recent times. They realise the importance of BCPs for business of all size.

As a company director, what are you doing to comply with your obligations under the Act ? I would like to see the reponse from your insurance company if you told them you do not have a BCP in place.

The advantages of private companies having a board are many. The business owners I meet who believe that only they know how to run their business are often the ones who end up being very lonely and eventually run their business into the ground.

No one has a mortgage on smart ideas and putting together and independent advisory board is a great sanity check for you in your business and certainly helps you make better decisions. Combined with this is the need to have an effective chair to run the meetings. Their role is to provide leadership in the way the board conducts its business.

If a formal board of directors is in the too hard basket then you should be looking at establishing an advisory board and it can be a great way to transition to a formal board in the future. I recommend you start with three others and yourself, do not have friends on the board, look to have a mix of industry experience, independence and someone not from your industry.
You must pay them for attending meetings and have a structure in place to run professional and effective meeting.

The objective is that the board adds value to the business.

Those I know who have an advisory or formal boards tell me how effective it is to raise to a higher level of performance.

As we read about and see the destruction caused to homes in the floods in Qld and Victoria its time for all business owners to stop and think about a plan if something like this hit your business.

All large companies I have been involved with have such a plan ( known as a BCP, Business Continuity Plan ) yet I cannot name one family or privately owned who has such a plan.

In fact where I have recommended such a plan, the repsonse is Why do we need this? or  We have plans thinking that its all about having back up for the IT system.

I have a good friend in Ipswich who just lost his whole business to the rising water and now he has to rebuild and start again. He is more fortunate than others in that he can afford to do this. However it's the mental emotional aspects that will effect him the most.

If you have clients and cutomers who have a need to fill their own orders, they will go your oposition to meet their demand.

It's a difficult situation and one that all business owners should role play for future reference just in case. This should be followed up with written plans and regular simulations.