A recently published survey revealed that a good portion of Alberta’s small and mid-sized enterprises (SMEs) lack disruption insurance. The discovery is a troubling revelation, especially following the fairly recent wildfire incident at Fort McMurray.
The Business Beat report prepared by ATB Financial found that while 23% of the Alberta-based SMEs surveyed have experienced a significant disruption in their business, 46% of the SMEs admitted that they do not carry disruption insurance.
ATB’s survey noted that 78% thought that a continuity plan was important. Despite this, only 47% of those who answered such had actually followed through with their plans. The study found that larger businesses were more likely to have a plan in place.
Of the SMEs surveyed that did not have a continuity plan, 62% have said that it was not a priority.
“Disasters, both natural and personal, happen. And by nature of the definition, they strike quickly and without warning,” commented ATB executive vice-president of Business & Agriculture Teresa Clouston. “So a plan that contemplates how to deal with disruption can allow business owners to respond from a position of strength and thoughtfulness versus panic. We recommend building a recovery plan into your business plan and revisiting that plan yearly.”
In regards to succession planning, 91% of the survey’s respondents have acknowledged its importance. When the survey asked which of those SMEs actually have a succession plan in place, only 58% confirmed. Among business owners who answered that they have a plan, the most common approach observed was to sell or transfer the business to a relative (48%).Thirty-four per cent (34%) said that their succession plan involves selling their businesses to third parties, while 32% plan to sell their company to existing management or other employees.
“We’re seeing a common theme in these survey results,” said Clouston. “Business owners clearly realize the importance of continuity and succession planning, even identifying such planning as a priority, but many don’t seem to have the time or resources to do either.”
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