Small business crisis plans few and far between

Canterbury firms' experiences could be useful to companies in other parts of the country. Photo / Simon Baker

New Zealand small and medium-sized firms are highly unprepared for a future crisis similar to the Christchurch earthquakes, a study has found.

Massey University's annual BusinesSMEasure canvassed 1000 companies across the country. It found only a small proportion of the firms surveyed had a formal continuity plan in place and fewer than 10 per cent had a written crisis management plan.

"We found a high degree of vulnerability once we looked at how firms were prepared for particular crises and what their reactions might be," said Professor David Deakins, director of Massey University's Centre for Small and Medium Enterprise Research.

According to the report, firms' vulnerability increased if a crisis was caused by natural disaster, rather than an internal issue.

But the survey also found that a written plan did not necessarily make a company more resilient - experience in dealing with the consequences of a crisis was more important.

Deakins said the survey found Canterbury businesses were much better prepared and less vulnerable than those in other parts of the country.

"The experience of dealing with a natural disaster [the Christchurch earthquake] clearly raised the level of companies' crisis management planning and awareness," he said.

Canterbury firms' experiences could be useful to companies in other parts of the country, Deakins said

The report concluded that a national programme aimed at improving SMEs' resilience to disasters should be established.

"Any such programme would have a number of components, including training in business continuity planning, using online computer systems for financial and office management, methods for maintaining customers and building networks, and coverage of psychological elements, such as dealing with trauma," Deakins said.

Anthony Barker, managing director and owner of Christchurch uniform manufacturer Southern Monograms, knows all too well the difficulties of running a business in the wake of a major disaster.

After the February 22 earthquake, the firm's Sydenham base was placed behind a cordon for nine days after the building on the opposite side the road collapsed into the street.

Barker said the company's computer server "literally fell over".

"We couldn't even access our work computers via remote desktop so we were stuck, we couldn't do any administrative work," he said.

Since the earthquakes the company had begun using cloud computing - the use of remote servers to store information, Barker said.

"As long as we've got internet access we can log on from any PC and access all our accounting software and all of our programmes," he said.

"We could run this business from a beach in Cambodia."