SMEs ignoring disaster and cyber threats, with over half having no risk strategies in place

Over half (53%) of Australia’s small to medium businesses have no risk plan in place for fire, flood, cyclones or man-made disasters that could impact their business, the latest Sensis Business Index shows.

Australian businesses have faced many challenges from natural disasters in recent years, such as the Queensland floods of 2009 or bushfires across New South Wales, Victoria and Tasmania, but the statistics suggest many are not prepared.

The Sensis Business Index for the December quarter shows less than half (42%) of SMEs had strategies in place for managing staff in the event of a business disruption. 

Almost one third, (32%) had contingency plans for customers in the event of a risk to the business, while only a quarter (24%) had supplier plans and strategies in place for emergencies.

The survey found that one in six Australian businesses had suffered from an emergency or business disruption in the past 12 months. On a scale of one to 10, SMEs ranked the risk of fire at 3.3, storm at 2.9 and drought at 2.8.

Report author Christena Singh says that risk management strategies are a “major issue” for SMEs and should not be ignored.

“As our survey clearly indicates, many SMEs underestimate the risk of not having contingency plans in place in the event of a natural or man-made disaster. This could cost them dearly,” she says.

When it comes to preparing for the threat of cyber-attack on business data, Australian SMEs appeared to be more concerned, with businesses ranking the threat of cyber-attack four out of ten.

Almost all businesses (95%) reported that they backed up files, but just under half, 49%, reported that they did it at least daily.

Only one in five businesses reported that they backed up their records using cloud technology.

Singh told SmartCompany that there was a big gender imbalance when it came to cloud use.

“Male business owners were more than twice as likely to use the cloud than female business owners,” she says.

Singh says this is quite common with technology statistics, and as the cloud is still in the early stages of adoption she expects this to balance out as it becomes mainstream.

The Sensis Business Index surveyed the behaviour and sentiment of 1800 SMEs across Australia. A key finding from the survey was that SME business confidence leaped 21% in the quarter, spurred by more optimistic perceptions of the economy.

Christena Singh will be speaking as part of the Sensis Business Directions Breakfast series, along with COSBOAs Peter Strong and SmartCompany. The next will be held tomorrow, December 12, in Melbourne at 7am. You can register here.