Business mentor: Planning ahead will minimise economic impact of pandemic

Q. With all the talk of an imminent viral pandemic and the advice to "stay home", I wonder what the impact on small businesses may be. In the event of a total failure in the retail sector, will a tsunami of bankruptcies burst upon us in the wake of the bird flu or will landlords somehow have their share of the burden?

A. Small business sector specialist Sarah Trotman went to the Ministry of Economic Development for some advice:

1. The short answer is that although there is only a low probability of an influenza pandemic, it could certainly have a high economic impact if it does occur. The extent of this impact would depend on the severity of the pandemic. It would also depend on how well prepared we were. Effective contingency planning, at Government level and within individual businesses, could do a lot to minimise the risk of bankruptcies.

2. At the Government level, the Ministry of Health is leading an extensive interdepartmental planning process aimed at reducing the risk of a pandemic and its potential impact.

One product of this process has been the draft New Zealand Influenza Pandemic Action Plan.

This is based around a sequential five-stage strategy:

* Planning: To reduce the health, social and economic impact of a pandemic on New Zealand.

* Border management: To try to keep the influenza out of the country.

* Cluster control: To control and/or eliminate any pandemic clusters that may be found.

* Pandemic management: To reduce the impact of an influenza pandemic on the population.

* Recovery: To expedite the recovery of population health.

3. The work has also included contingency planning to ensure that Government payments would keep running in the event of a pandemic and discussions with the banks to ensure that they are well prepared.

4. Businesses can get help and advice on how to plan to cope with the possible effects of a pandemic from an on-line guide on the Ministry of Economic Development's website. This contains practical information on how to minimise the risks to a business from a pandemic.

The Department of Labour's website also gives advice on employment issues which could arise in the event of a pandemic. The Ministry of Economic Development is also looking at the possible development of further communications material which would be more tailored to the specific needs and circumstances of small and medium-sized businesses.