More than one-third of Canadian small business owners (35%) don’t have a contingency plan, says a CIBC poll.
After experiencing severe weather over the last year, approximately 38% of small business owners in Alberta and 23% in Ontario are re-evaluating their business interruption plans. That compares to 5% in Quebec.
“The reality is most [small businesses] need a plan in place to ensure they can withstand business interruptions without draining their personal savings,” says Shelley Swanlund, a vice president at CIBC. “It is important to have options such as access to a line of credit, or savings within the business, to tide you over during any interruptions.”
The poll says one in 10 small businesses experienced an interruption in the past year; weather is cited as the main disturbance, followed by illness or personal reasons.
And, 26% of business owners plan to use cash reserves, lines of credit or loans, or personal savings to overcome interruptions; 20% plan to use credit cards or insurance.
To prepare for business interruptions, CIBC offers the following tips:
- Have a business interruption plan. Small business owners should assess the impact of potential business interruptions. Review risks such as length of time you can operate without revenue. Then build a plan to manage the risk.
- Build flexibility into your plan. Natural disasters and other unexpected impacts can catch small business owners off guard. Be sure your business can withstand these impacts by having a flexible and forward-looking contingency plan to ensure your cash flow, sales, service, and savings are protected.
Percentage of Canadian small business owners rethinking contingency plans after natural disasters in the past 12 months, by region:
Percentage of Canadian small business owners without a contingency plan for business interruption, by region: