According to findings from Bentleys’ The Voice of Australian Business survey, it was relatively uncommon for the surveyed businesses to have either a formal written business continuity plan (17 per cent) or a risk management process (34 per cent).
Larger SMEs were better placed, however, with 41 per cent of medium businesses having a formal written business continuity plan, compared with only 10 per cent of small businesses and 8 per cent of micro-businesses.
Further, 56 per cent of medium businesses had a risk management process, compared with 34 per cent of small businesses and 21 per cent of micro-businesses.
The survey found that business interruption (27 per cent), goods in transit (26 per cent) and key person insurance (25 per cent) were the least common types of insurance among the businesses surveyed.
Building and contents insurance was more common, with 64 per cent of surveyed businesses saying they had it in place.
“SME owners tend to think they don’t need business continuity plans or risk management plans because they think ‘It will never happen to me’. However, it’s exactly that type of mentality that is putting them unnecessarily at risk,” said David Papa, director, assurance and advisory at Bentleys South Australia.
“The fact is, a large number of businesses, particularly SMEs, find it difficult to sustain their business operations in the face of a large, disruptive event, if [it occurs] out of the blue.
“Risk management planning is meant to provide a holistic view for business owners so they can understand the critical parts of their business and how to keep them going. Part of this process should also involve uncovering ‘blind spots’.
“A main blind spot we constantly come across with many of our clients is insurance. Many are unaware of the type of insurance they require or the adequate level of insurance they need in order to keep their business afloat should a major disturbance occur.”