Lack of planning could spell disaster for small firms

Bank of Scotland Business Banking surveyed 1,000 small businesses and found that although owner-managers believed a major incident would seriously jeopardise their business, 50% did not have formal procedures to follow in the event of a disaster.

However, among larger companies that employ 10 people or more, a majority, 57%, of firms said they had procedures in place.

Although smaller firms are more easily re-established, the survey suggests it is companies with fewer than 10 employees that would suffer most if a major incident were to occur.

The survey also revealed 76% of larger business back up information on a remote server or website, compared to just 48% of sole traders.

The lack of preparation is predominately due to owner-managers not having thought of putting procedures in place - 48% of those without a recovery plan said the idea had “never crossed their mind.”

Also, nearly one in three thought it too unlikely that a disaster such as fire or flood would affect their business.

Kevin Gillett, head of Bank of Scotland Business Banking said: “It is alarming to see how little thought and preparation is being put into disaster planning by many companies.”

“Such planning need not be burdensome or costly and, given that it might prevent a business’s closure, I would recommend that every owner-manager considers the issues raised by these findings.”

© Crimson Business Ltd. 2006