Business Advice

How to prepare your business for a natural disaster

- January 12, 2024 4 MIN READ

 

Australian small and medium-sized businesses are increasingly factoring natural disasters into their business planning. Late last year a survey of 1000 business owners and operators found, in the 12 months, one in ten (11 per cent) were impacted by a natural disaster and a quarter (26 per cent) were preparing for one¹.  Emma Fawcett, General Manager SME at MYOB, shares her best advice to help your business be disaster-ready.

Parts of the country have already faced severe natural disasters this season, with more expected before the summer ends. If you haven’t already, now is the time for business owners to put plans in place to maximise their ability to stay as safe and productive as they can, even in extreme weather conditions.

It’s vital to prepare, ensuring protection for people, products and intellectual property.

It may seem overwhelming, but there are some measures business owners can take to ensure you’re equipped in case of business disruption.


How to prepare for a disaster

Keep people safe

The safety of your people is the number one priority in the case of any disaster, so look at the alert and evacuation procedures you have in place, and make sure all employees are aware of procedures to follow.

Extreme temperatures also pose a risk to the health of workers. If there’s no mandated temperature at which workers should down tools in your industry, it comes down to what’s reasonable in every setting. Remember workplace health and safety requirements mean you need to keep your people safe from heat stress and heat-related illness.

Heat can also have a significant impact on worker productivity. A study on the effects of temperature on productivity found every degree over 24 degrees celsius decreases productivity, so it pays to keep your people cool.

Check your current climate control systems are robust enough to handle the heat, and that they are energy efficient to avoid skyrocketing energy costs and emissions over the summer.


Are you covered for disaster?

Check the fine print of your business insurance. For example, are you covered for damages in the case of a natural disaster? Are you confident about business continuity in the face of flood, fire or anything else you may be at risk of? If you’re in a location that’s more likely to be impacted it’s particularly important to check the value of your insurance adequately covers potential losses.

Now is a good time to speak with your insurer to get crystal clear on what your business is covered for, and pressure test how robust your insurance policy really is.

Communication and contacts

While we all hope for the best, we need to prepare for the worst, and having communication plans in place will help if you need to distribute last minute updates to team members and customers around impact to your business.

This could include having drafted messages ready in the case of an unexpected business shut-down due to an emergency, or a delay in services or product supply due to extreme weather. It might also include internal communications for your employees around how they can keep themselves safe or notify them if they need to be prepared to work in another location at short notice.

Create a critical contacts document which includes emergency service details and important business contacts. This should include those within your organisation, as well as clients and partner businesses who may need to be alerted in the event of an emergency or a stop-work situation.

Plan out every likely scenario and get your communications ready, to alleviate a last-minute scramble.

Securing your tech

Is your business-critical data safe? In a digital world, it’s important to backup critical data to the cloud or a remote server, so that disruption to your onsite tech doesn’t mean damage to your data.

Create a secure digital vault for your business-critical information and documentation, so that you’re in a strong position to continue with ‘business as usual’, even if the physical environment is uncertain.

Customers and cash flow

Whether summer is a slow period for your business or one of your busiest trading seasons, spend some time forecasting the potential impact of extreme weather on your customers and cashflow.

If you’re expecting a busy sale period but your warehouse staff or suppliers could be impacted by extreme weather or heat, think about how you might manage customer expectations ahead of time, including letting them know about potential delays in dispatch or delivery.

If your business is highly likely to be affected by extreme weather, for example if you’re in the tourism or hospitality industry in a high-risk area, it pays to do some conservative planning around cashflow and preparing for worst-case scenarios and reduced customer numbers.

The new normal

If recent years have taught us anything, it’s to expect the unexpected. Extreme weather is becoming the new normal, and every business has the potential to be impacted, especially those in areas where natural disasters and extreme conditions are more likely to occur.

Involve your people in planning and have conversations about potential impact. Even if your workers aren’t directly affected by extreme weather, their families and loved ones might be, so be compassionate about the additional stress extreme weather events could cause.

Whatever happens, preparation and planning is the key to your ongoing business success.

[1] MYOB Business Monitor, December 2023

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