May 6, 2010

Was your business impacted by the events of 9/11 and SARS? Directly or indirectly, events like these, regardless of where they take place, have the potential to seriously disrupt your operations. Yet today, limited business continuity planning remains an issue, placing Canada's small and medium businesses at risk. That's the warning from industry associations and financial institutions who worry that too many small- and mid-sized Canadian companies are ill-prepared to deal with the effects of a pandemic, terrorist attack, major power outage, or natural disaster.

"Small business owners are very busy people who are focused on getting the next order out, the next sale made, responding to customers and working with suppliers. It can be difficult to find time to plan for something that we all wish will never happen," says Bruce McConnell, vice president, operations support & strategic initiatives, BDC Consulting.

While some companies have developed contingency plans, most have not, according to Canadian Manufacturers and Exporters (CME). The organization says that this lack of preparedness not only threatens the viability of a large sector of the Canadian economy, but also jeopardizes the delivery of critical goods that depend on complex supply chain systems. This is a particular concern for companies with fewer than 100 employees, which make up 97 per cent of goods-producing businesses and 98 per cent of all service-producing businesses in Canada.

"Small and medium sized businesses are the engine of Canada's economy, yet they are particularly vulnerable because they have fewer employees and limited resources to respond when an emergency happens," says Jean-Michel Laurin, vice president, Global Business Policy at CME.

Pandemic a case in point
The prospect of a worldwide flu pandemic is one example of a large-scale threat that would have far-reaching consequences for Canada's SMEs. The Public Health Agency of Canada, the World Health Organization and other experts warn that it's not a question of 'if', but 'when' the next flu pandemic will strike. Considering Canada's reliance on trade, the economy could suffer by as much as $60 billion or more if crossings at the Canada-U.S. border were restricted, according to CME.

If a pandemic were to strike, the biggest impact would likely be on staffing. While some employees could be ill, others might be too frightened to come to work and many might have to stay home to care for affected children or other family members. Experts suggest that businesses should anticipate absences of up to 50 per cent of their staff for about two weeks at the height of a severe pandemic, and lower levels of absences for a few weeks on either side of the outbreak's peak.

"Business continuity planning is not as complicated as it seems," says CME's Laurin. "You just have to think about how you're going to react if such a thing happens and the steps you need to put in place to make sure you're ready, like making sure you have an updated list of all your employees' personal contact information."

Taking a proactive approach to business continuity planning can also give your company a competitive advantage, according to BDC's McConnell. "It demonstrates to employees, shareholders and customers that should a pandemic or other emergency happen, you have a plan in place to continue supplying critical products or services."

A variety of resources are available to help businesses prepare for the worst and ensure that critical services or products are delivered during a disruption. CME offers a complimentary continuity planning guide to help manufacturers prepare for a pandemic.
A free online guide has also been developed by BDC, including easy-to-use templates and an eight-step process to assist companies in establishing an emergency preparedness team, listing customer and supplier contact information, identifying critical operations and establishing a process to monitor staff absenteeism.

Business owners can develop a continuity plan themselves, delegate the work to an employee or hire a consultant. Last year, for example, BDC provided business continuity planning and other customized consulting services to more than 2,000 Canadian companies.

Adds McConnell: "In designing our guide, we wanted to make it accessible, easy and pragmatic for business owners so they could do it themselves, or retain outside consultants to help them. It does require a certain investment in time, but the alternative could be devastating for your business."