There is growing interest around ‘disaster preparedness’ amongst the Small and Medium-sized Business (SMB) sector. Natural disasters in recent years, particularly in the Asia-Pacific (one of the most disaster prone regions according to the United Nations) have highlighted negative impacts on the private sector (primarily on SMBs). Climate change and the increase in frequency of floods and earthquakes have struck many small businesses globally, forcing them to face huge losses, or completely shut down (especially in absence of a sound disaster preparedness and recovery plan)hh

The 2011 floods in Thailand affected nearly 550,000 SMBs and 2.3 million jobs (Office of SMEs Promotion, Thailand) 

During the 2015 earthquake in Nepal, Tourism – the biggest industry in Nepal, and that brings in the most foreign revenue was the worst affected (Ministry of Tourism, Culture, and Civil Aviation – Nepal)

Previous disaster events and studies in the SMB sector show that businesses that have a well thought-out preparedness plan in place have a better chance to recover, and continue operations faster. When we think of disasters we often imagine massive floods and earthquakes, however businesses are vulnerable to internal threats on a daily basis from fires, leaking pipes, and system failures – which can be similarly catastrophic to their business.

One of the key aspects to keep in mind when thinking about the importance of preparedness in the SMB sector is how local communities and businesses are ‘inter-connected’. Communities depend on their local market for the daily supply of goods and services, as well as livelihoods (in majority cases, workforce for small businesses comes from communities). Similarly, SMBs are becoming more and more prominent in emergency response. Let’s take the example of telecommunication industry  (especially local mobile outlets and retail shops) that are increasingly working alongside governments, and international/local NGOs in the transfer of ‘emergency cash’ and ‘vouchers’ to households affected by disasters, as well as providing early warning messages via cell phones. Let us not forget that for any preparedness plan to work, it is important that governments, businesses, international organisations, and donor agencies do not work in silos and consider how the local and especially vulnerable communities will benefit from their preparedness actions, and how can they in fact be involved in the process.

There is no doubt that investing in disaster preparedness is easier said than done and can be costly, especially for small businesses however the idea is that businesses take the maximum preparedness measures possible and available to mitigate losses, and be able to recover in the fastest time possible.

Non-profit organizations including the Red Cross and Red Crescent Societies and the UN are increasingly partnering with the private sector; including large multinational corporations and insurance companies (e.g. advocacy around lower insurance premiums) to seek ways to support SMBs’ preparedness Needless to say, more needs to be done in this area and especially as a collaborative effort.

Visit Preparecenter.org for more info on the Red Cross Global Disaster Preparedness Center and upcoming Business Preparedness Initiative.