How can SMEs survive natural disasters?

While it may not be earthquakes or tsunami’s that Singapore businesses face, flash flooding, typhoons and strong winds are all natural disasters that have hit Singapore’s shores, having the potential to create damage to property, stock, client documentation and information all common within a facet of industries and the potential for loss of thousands of dollars is very real.

Statistics from the US Federal Emergency Management Agency (FEMA) indicate that around 40% of businesses do not survive at all after a natural disaster, that 25% fail after the first year and that a disturbing 95% of small to medium businesses will never recover.

In Australia, the retail and hospitality industries were devastated after the 2010 floods with businesses never recovering or re-opening after a long period of time, thousands of dollars worse off.

Given the strong business structure Singapore ‘s economy has built and with one of highest GDP (Gross Domestic Products) per capita, along with generating the fastest growing economy in the world, Singapore has a well deserved reputation for generating business growth needed to protect and sustain Singapore products and services in the event of a major disaster.

In terms of Business Continuity Management, one of the challenges Singaporean small to medium businesses face is not only the understanding and implementation phase of a Business Continuity Plan (BCP), but for the sustainability and ongoing management in order to execute a BCP successfully if and when the time comes, with the limited funds and resources at their disposal.

In order to support Singapore businesses and ensure continued sustainability in the event of a natural disaster or terrorist attack, the Singapore Government introduced (and was the first country in the world to do so) a Business Continuity Management Standard in 2005. Since then, the Singapore Government have urged all businesses to help build their knowledge and competency levels in implementing Business Continuity Plans in order to respond more effectively to events that threaten normal operational practices.

The ‘Singapore Standard for Business Continuity Management SS540’, has been developed to help provide businesses with a framework and has the elements required to implement, manage and continuously improve a Business Continuity Plan to ensure resilience and protection of assets, staff, stock, information and documentation.
Singapore’s small to medium businesses and the steps to
surviving after a natural disaster

The Singaporean Government has also taken steps in supporting Singaporean businesses and introduced a 3 point scheme over 5 years from 2008-2013 focusing on:

1. Reviewing the level of ‘BCP Readiness’ through the tender process within public-private sector contractors and public and government agencies, encouraging any Singapore business providing the government and residence of Singapore confidence that government services will not be disrupted in the event of a disaster. The implementation of Business Continuity Plans required creates competitive advantage to potential clients within the public-private sectors.

2. The Singapore Government’s second point creates financial incentives for BCP Subject Matter Experts wishing to obtain SS540 Standard Certification in order to support BCP Readiness. The second point also provides financial incentives to specific industry clusters that form relationships with Subject Matter Experts of that industry. Certain industries are prioritised in areas such as medical and environmental technology, electronics, logistics and food manufacturing with up to 70% incentive costs paid for to support BCP Readiness implementation.

3. The Singapore Government has also included as part of their 3 point scheme to work with SPRING (Standards, Productivity and Innovation Board), responsible for supporting the growth and innovation of Singapore businesses and the EDB (Economic Development Board), a government lead government agency, focused on establishing, planning and executing strategies to supporting the sustainability of Singapore’s economy. These government agencies will work with business chambers and industry associations to help provide Singapore businesses with BCP understanding and benefits through awareness and training programmes.

Even with the financial support and backing of the Singapore Government on effective operational practices of BCP’s, small to medium businesses may still deter and find it difficult to implement based on financial, time and resource factors.

There are many steps that can be taken to survive as a small-medium business after a natural disaster and how to keep the momentum to sustain that need effectively.

• Understand your business and your customer’s business. Ensuring your understanding of yours and your customer’s business can ensure that the most well equipped continuity plan is in place, implemented and sustained effectively.

• Strong communication between your organisation and your customer means all parties are working together towards the same goal. This means understanding and taking part in their own Business Continuity Plan and working together to support each other. One cannot survive without the other.

Act on these first two points as part of the governments second of the 3 point scheme.

• Do your research- Utilise the knowledge and information made available on effective and sustainable Business Continuity Plans. Understanding the framework and structure through tools such as Singapore SS540 Standard can go a long way to understanding and focusing on effective implementation of a BCP.

• Change your organisations culture and understanding of Business Continuity Management. In order for successful implementation, you will assign key players to help create the ‘Disaster Recovery Team’ (DRT). This group of individuals help to manage the entire process however cannot be fully executed without the knowledge base of all team members of the organisation. From frontline employees to executive level and members of the DRT, there requires a certain level of BCM understanding. Creating a culture that supports and embraces the need for BCM execution, will help with the sometimes arduous task of implementation and ongoing management if support is not on hand.

• Give your organisation the opportunity to invest in the fundamentals of protecting your business and your customers. Look into the government’s 3 point scheme and be proactive in whether it can support your business.

Natural disasters or attacks can happen at anytime and unfortunately no business is immune. It is how resourceful and quick to act Singaporean businesses are that will increase its survival rate. Businesses may believe that the probability may not be great, however, it’s the consequence can be devastating.

Actively engaging in the implementation of Business Continuity Management can protect businesses and although your investment funds may be limited, arming yourself with knowledge and the relevant tools necessary now, will protect your business from one of the hardest recovery and survival periods.

Jodi Parry, Director, The Ninja Report