Edmonton — The Fort McMurray wildfire this past spring brought with it disruption—of peoples’ lives and businesses. It was the third time in the last five years that an Alberta natural disaster caused the evacuation of entire communities. Homes and businesses were destroyed, followed by massive cleanup and rebuild efforts.
ATB Financial’s latest Business Beat survey discovered that 23 per cent of Alberta-based small and mid-sized enterprises (SMEs) have experienced a significant disruption in their business. Despite this, 46 per cent of businesses surveyed said they did not carry disruption insurance.
When it comes to continuity planning, 78 per cent of the SMEs surveyed believed a continuity plan was important. However, less than half (47 per cent) have followed through. Larger businesses are more likely to have a plan in place. Of those businesses that do not have a continuity plan, 62 per cent said that it wasn’t a priority.
“Disasters, both natural and personal, happen. And by nature of the definition, they strike quickly and without warning,” said Teresa Clouston, ATB’s Executive Vice-President, Business & Agriculture. “So a plan that contemplates how to deal with disruption can allow business owners to respond from a position of strength and thoughtfulness versus panic. We recommend building a recovery plan into your business plan and revisiting that plan yearly.”
On the topic of succession planning, nine out of 10 (91%) respondents acknowledged its importance. However, just over half of Alberta SMEs (58 per cent) have a succession plan in place. Among business owners who have a plan, the most common approach is to sell or transfer the business to a family member (48 per cent). Thirty-four per cent plan to sell their business to a third party, while 32 per cent hope to sell their company to existing management or other employees.
“We’re seeing a common theme in these survey results,” added Clouston. “Business owners clearly realize the importance of continuity and succession planning, even identify such planning as a priorities, but many don’t seem to have the time or resources to do either. We get that. ATB relationship managers and entrepreneurship teams are here to listen and help. Plus, we’ve just established an advisory services team and have access to a lot of great resources we can connect entrepreneurs with to begin, or continue, this critical conversation.”
Meanwhile, the ATB Business and Economy Indexes both took a downward dip. The ATB Business Index, which measures business owners’ optimism in their own operations, fell to 43.6, down from 47.3 in the previous survey. The ATB Economy Index, which measures business owners’ confidence in the Alberta economy, dropped nearly three points, from 32.3 in the last survey to 29.6. A score above 50 indicates more respondents are feeling optimistic. A score below 50 suggests more respondents are feeling pessimistic.
For the complete Business Beat survey results, please click here.