Small business in Australia is reeling. In most people’s living memories this country has not seen anything like it. Floods, Fire, Drought & Covid 19 and yet another flood last week – Small Businesses have taken all the hits…and this is all in the past 18 months!
Good crisis management tells us that there is more to come because as one crisis ends, another emerges. Australia is yet to really feel the financial costs of the multiple crises as that is yet to reveal itself in the longer term.
As the flood waters subside on the latest crisis, it is critically important for small businesses to become much more resilient in their respective marketplaces. While no one can possibly predict the exact nature of any catastrophic event or where and when it will strike, we can prepare. This is the one constant and it gives SME’s great peace of mind.
Prepare, Prepare, Prepare!
Preparation achieves a number of things for small business owners. It minimises the impact of the ‘hit’ when it comes, and it allows the business to get back on its feet in the shortest possible time. If we were all able to travel back in time to January 2016, a full five years prior to the above-mentioned disasters, crises and pandemics knowing what we know today, how very differently we would all have prepared for the past 18 months.
The cornerstones of good Crisis & Emergency Management are essentially preparedness and planning. Get these two elements right then the actual impact of the inevitable crisis and / or emergency and the aftermath is greatly minimised. Mark Bouris, entrepreneur and businessman, (Yellow Brick Road wealth creation etc.), said, “The best time to plant a tree was twenty years ago. The next best time is right now.” This is completely correct and in fact, Mr. Bouris has encapsulated the entire study of Crisis Management, (planning & preparation), into one succinct sentence.
Resilience, Depth & Redundancy
Small business has a challenge with the issue of redundancy. By their very nature, small businesses have to ensure their owners and staff are multi-skilled. This means that they have no fat in the system, not the way large corporations or Govt’ Dept’s have. They are by definition tightly coupled systems meaning that if one thing goes wrong in one area of the business, it has a direct and significant effect on all other aspects of the enterprise. Larger enterprises can and do often work in silos that can and do operate independent of one another. Small business does not enjoy that luxury.
A good example is people in third world countries. They are extremely resilient. They have built redundancy and depth into their personal and professional lives. Their Governments are broke and cannot help them like ours can help us. Metaphorically speaking, there is no ‘rescue truck’ coming for them.
They understand acutely the principles of risk & crisis management, planning and preparedness. Further, and by extension, they understand acutely the principles behind Reuse / Recycle / Reduce.
They are a study in efficiency, (the measure of waste), and they use resources effectively. They understand the need to build redundancy and depth into their everyday lives. They have to rely entirely on themselves in an unforgiving world and Australian small businesses could adopt some of that mindset.
Tips for Crisis Preparation & Planning for SME’s
Finances – Pay down debt and have some cash reserves on hand. Interest rates are low, take advantage of this over the next two to three years. If a second and third wave of Covid 19 were to hit or another flood as we have just experienced on the East Coast impacted us all, businesses will need to close for a time. If the past 18 months is an indicator, the best advice would be to work towards a 2-to-3-month cash reserve if your doors close.
Mental Health – This could perhaps be one of the biggest issues to emerge from the past 18 months for small business owners and their staff. The statistics on this are a real cause for concern and the effect on the balance sheet for any small business is significant. This must be addressed and there are any number of organisations you can reach out to for advice – Govt’ and/or private.
Dependance – Small business needs to break chains of dependence where possible. Consider alternatives to everything you have and every way you do business. Example…If another flood washes your business away, can you relocate? Have you got alternative premises? Can you co-locate with another small business? Are there strategic partnerships you can form right now that can be activated in times of need? Have you got alternative suppliers? Where can you get skilled staff if you need to quickly scale up?
About the author
Nick Bell was a Watch Commander in the NT Fire and Rescue Service for 33 years. As a Critical Incident First Responder, he responded to and took operational command of countless emergencies such as structure fires, motor vehicle accidents, HAZMAT, cliff rescues, bush fires and other major incidents.
Outside of the Fire & Rescue world, Nick has been the MD of his WH&S / Risk Management consultancy – www.sdca1.com.au for the past fifteen years.