How you can safeguard your business in case of a disaster

As floodwaters recede in Queensland and NSW, business owners are now assessing the full extent of the damage from one of the worst natural disasters Australia has ever seen. 

The enormity of the clean-up will be confronting and emotionally challenging. In many parts of both states, homes and businesses are uninhabitable, and thousands of people have been displaced. 

For business owners, it is important to start conversations with insurers as soon as practicable and access urgent financial assistance if necessary for those struggling to reopen, replace supplies or critical assets. 

Small business grants of up to $50,000 (or $75,000 for primary producers) can be obtained, as well as low interest loans in Queensland and disaster relief loans in NSW. 

For individuals who have lost income because of the floods, the Disaster Recovery Allowance is available — a fortnightly payment for up to 13 weeks for employees and small businesses. Check with your local government about assistance available in your area.

In the aftermath of a sudden closure where infrastructure or assets has been damaged, business owners should not look too far ahead and focus on the immediate issues.

The physical and mental health of business owners and their staff is the overriding concern. Draw on community support and be comfortable in reaching out for help because there is no more important asset to the business than the wellbeing of its people.

Focus on bringing systems such as plant and IT networks back online, taking steps to restock inventory and keep communication channels open with clients, financiers, and suppliers.

In the coming weeks and months, the conversation will switch from recovery to examining how to build better resilience against future disasters. There are three key areas to focus this discussion.

Strengthen disaster and emergency management plans 

The value of up-to-date business continuity plans came into focus at the start of the COVID-19 pandemic. Business owners should examine how these plans be adapted to shift from a COVID-19 footing to one of mitigating the impact of a physical threat.

Best practice is to regularly review emergency management plans annually, but also if there is a fire, flood, or other disaster so businesses can ensure that preparations are current

Use the Queensland and NSW flood disaster as an opportunity to evaluate your risk profile and test disaster readiness plans, even if your business was not affected. This is not an exhaustive list but it includes some of the key considerations based on the recent flooding. 

Many roads have been severely damaged on the east coast by the floods, potentially crippling supply and transport routes for weeks — how would your business negotiate being stranded?

The primary difference between closures from COVID-19 and a flood is the loss of infrastructure, such as electricity, internet and mobile phone, and other services. Can your staff act independently to follow the management plan when communications platforms go down? 

Clear and agreed steps for each group to take becomes particularly critical if business owners, management or key staff are absent or cut off. 

Where scale permits, businesses should consider if secondary sources are necessary to provide a level of redundancy. With the falling costs of back-up power sources, is it time to consider a battery or generator to keep plant production moving? 

Preparedness may include creating an evacuation plan, developing a checklist to manage incidents, and assess where interruptions will have the highest impact on the business and take steps to minimise them. 

Business owners may have a direct relationship with an insurer, or their coverage may be maintained through a broker. In either case, it is a good opportunity to sit down and ensure coverage is adequate. 

Diversify locations to recover and build resilience

Consider whether a disaster recovery location could be quickly arranged. For people-based businesses or where face-to-face contact is essential, could you access a temporary location set up with appropriate IT infrastructure and meeting rooms at short notice?

Having one location for stock, staff, and other items essential to the business leaves it vulnerable. Diversify storage locations, and not just for physical elements — back up data and store copies in separate sites, as well as consider stock and inventory warehousing at multiple locations. 

Consider locations for offices, warehouses, transport, and supply routes that are less prone to fires and floods. If regular supply or transport routes are cut off, are there alternatives available? 

Protect your data

Paper-based solutions carry enormous risk in terms of physical loss, and potential data breaches through theft. Strongly consider encrypting customer data and using secure cloud-based storage system as a digital back-up. 

Businesses struck by disaster are also more vulnerable to cybersecurity threats and data breaches. In the rush to get systems back online, compromising on security risks compounding problems and provides opportunities for cybercriminal to exploit systems in a period of weakness.

Natural disasters on a scale rarely before seen have caused devastation across the east coast of Australian in recent years. A well-prepared business can minimise the impact if fires or floods inflict damage and it gives the business its best chance of a quick recovery. 

Disasters rarely arrive with a warning so safeguard physical business assets and review disaster and emergency preparation plans regularly.