As some businesses react by using cash, credit or personal savings
during times of business interruptions, others admit they have not
taken any steps to protect their business
TORONTO, May 12, 2014 /CNW/ - Despite the rash of severe weather
incidents that have shut down Canadian businesses from days to weeks in
the last year, more than one third (35 per cent) of small business owners still don't have contingency plans, finds a new
CIBC (TSX: CM) (NYSE: CM) poll.
Entrepreneurs in two provinces hard hit by major storms - last summer's
floods in Alberta and ice storms in Ontario this winter - are
rethinking their financial preparedness. Approximately 38 per cent of small business owners in Alberta and 23 per cent in Ontario are re-evaluating their business interruption plans.
"While more small business owners are thinking about contingency plans,
the reality is most need a plan in place to ensure they can withstand
business interruptions without draining their personal savings," says
Shelley Swanlund, Vice President, Business Banking and Head of Small
Business, CIBC. "It is important to have options such as access to a
line of credit, or savings within the business, to tide you over during
any interruptions."
One in 10 small business owners have experienced a business interruption in the
past 12 months, the poll finds. They cited weather as the main culprit
for the disruption, followed by illness or personal reasons of owner.
Unlike those in Alberta and Ontario, just 5 per cent of small business owners in Quebec say they are rethinking how they'd
cope if a natural disaster impacted their business.
Some business owners counting on cash, credit and personal savings in
times of business interruptions
The CIBC poll finds that 26 per cent of business owners plan to use cash reserves, lines of credit or loans,
or personal savings to help them get through times of business
interruptions, while 20 per cent plan to use credit cards or insurance.
"We recommend small business owners speak with their advisors and build
flexibility into their plans to help them see through any cash flow
interruptions," says Ms. Swanlund.
To prepare for business interruptions, CIBC offers the following tips:
-
Have a business interruption plan. Small business owners should assess the impact of potential business
interruptions. Review risks such as length of time you can operate
without revenue. Then build a plan to manage the risk. Your bank can
help - for example, CIBC small business advisors can work with owners
to help them plan for challenging times and explore the options
available, such as access to a line of credit with a sufficient limit
to address any impact to cash flow.
-
Build flexibility into your plan. Natural disasters and other unexpected impacts can catch small business
owners off guard. Be sure your business can withstand these impacts by
having a flexible and forward-looking contingency plan to ensure your
cash flow, sales, service, and savings are protected. Work with your
advisor to explore options, such as routinely setting aside a small
amount of cash towards a savings account.
-
Monitor your plan on an ongoing basis. If any business interruptions could have a significant impact on your
business, be sure to continuously monitor the environment and make
adjustments based on changes in your business needs. In the event that
a business interruption occurs, be sure to keep your business advisors
informed. Many financial institutions are prepared to work with their
clients during unexpected interruptions, particularly if they are
engaged in understanding the impact.
KEY POLL FINDINGS
Percentage of Canadian small business owners rethinking their current
business interruption practices and plans due to the prevalence of
natural disasters in the past 12 months, by region:
National
|
19%
|
Atlantic Canada
|
9%
|
Quebec
|
5%
|
Ontario
|
23%
|
Manitoba/Saskatchewan
|
17%
|
Alberta
|
38%
|
British Columbia
|
18%
|
Percentage of Canadian small business owners who do not have a
contingency plan for a business interruption, by region:
National
|
35%
|
Atlantic Canada
|
43%
|
Quebec
|
41%
|
Ontario
|
31%
|
Manitoba/Saskatchewan
|
32%
|
Alberta
|
35%
|
British Columbia
|
36%
|
The poll was conducted by Leger through a Web survey from February 12 to
19, 2014 among a representative sample of 500 English- or
French-speaking business owners or decision-makers in Canadian
companies (not publicly traded or NGO) with 500 employees or less. The
results were weighted according to region and number of employees to
ensure a sample representative of the entire population under review.
CIBC Small Business Services
For more than 140 years, CIBC has been providing small business owners
with the advice, services, and support they need to thrive and grow.
CIBC recognizes that the business and personal finances of small
business owners are often intertwined, which can present both
opportunities and challenges. We believe that the best advice comes
from someone who understands your needs as a business owner and as an
individual.
CIBC provide small business owners with the services of a dedicated CIBC
Small Business Advisor, who acts as a single point of contact for all
small business owner needs. This experienced professional is committed
to understanding the business and the industry in which small business
owners operate, as well as their personal financial goals. CIBC
business advisors work with small business owners to find integrated
solutions to help them achieve their vision for their business and
their life.
About CIBC
CIBC is a leading North American financial institution with nearly 11
million personal banking and business clients. CIBC offers a full range
of products and services through its comprehensive electronic banking
network, branches and offices across Canada, and has offices in the
United States and around the world. You can find other news releases
and information about CIBC in our Media Centre on our corporate website
at www.cibc.com.
SOURCE CIBC