Skip to main content

News Feature

Harvard academic rates big-thinking Qld small business

ONE of the world’s leading researchers of small business, Harvard Business School professor John Lerner, will headline the official launch of the 2014 Queensland Small Business Week by State Premier Campbell Newman on Tuesday at Brisbane City Hall.

State Minister for Tourism, Major Events, Small Business and the Commonwealth Games, Jann Stuckey said Prof. Lerner would address the theme, When small business thinks BIG at the official business luncheon launch event at which about 200 business, government, industry and community leaders can join a panel discussion led by the international business expert. 

Ms Stuckey said the event was one of five Ministerial events and more than 100 activities planned across Queensland during the Week, which runs from September 1-6.

“We have invited Professor Josh Lerner from Harvard’s Business School to discuss how Queensland business is performing on the world stage,” Ms Stuckey said.

“I am excited about the opportunity to join some of our 400,000-strong hard-working small businesses in celebrating 2014 Queensland Small Business Week.

“Small businesses employ about one million Queenslanders, that’s more than 50 percent of all private sector workers.”

Ms Stuckey said the When small business thinks BIG event would focus on what business can achieve when it thinks globally.

She said 2014 Queensland Small Business Week celebrates the role small business plays in the Queensland economy.

Prof. Lerner is the Jacob H. Schiff professor of investment banking at Harvard Business School, and head of the Entrepreneurial Management unit.

Prof. Lerner sits on the World Economic Forum and presents annually on small business and entrepreneurship.

Business leaders can register for the event on the Queensland Government’s business and industry portal.

www.business.qld.gov.au/smallbusinessweek

 

ends

ACCC chairman wants Australia’s ‘competition culture’ reinvigorated

AUSTRALIA has retreated from its culture of fair business competition and Australian Competition and Consumer Commission (ACCC) chairman Rod Sims is eager to redress the situation.

Mr Sims told the Committee for Economic Development of Australia (CEDA) State of the Nation Conference in Canberra on June 23 that the current ACCC-supported Harper Review provides an ideal opportunity to reinvigorate Australia’s competition culture. 

“Australia has lost a lot of its pro-competition culture that it gained from the 1990s National Competition Policy. Clearly we need ‘Hilmer Mark 2’, as the current Harper Review is styled,” Mr Sims told the conference.

The review was instigated by the Federal Government, out of an election promise, as a ‘root and branch’ examination of competition law and University of Melbourne emeritus professor Ian Harper is heading it up. Prof. Harper  is also a partner at Deloitte Touche Tohmatsu and a director of Deloitte Access Economics.

The ACCC chairman said effective competition policy depends on using competition and other incentives to boost productivity, effective competition laws and creating processes and institutions that continually foster competition.

In listing areas where competition has taken a back seat, Mr Sims said the prevailing approach to privatisation raises particular concern.

“Where governments are increasingly failing is in ‘how’ to privatise,” Mr Sims said.

“Privatising in ways that limit competition in order to maximise the one-off sale proceeds is the wrong way. Such an approach increases the sale proceeds by effectively taxing future generations and Australia’s future competitiveness.”

In discussing micro economic reforms, Mr Sims said infrastructure is a major area of unfinished business. He identified road supply and usage, congestion pricing and shipping as three areas that could be tackled.

“I always find it irritating when people say Australia has picked all the low hanging micro economic reform fruit. We have not; and besides, there is never only one crop,” Mr Sims said.

In foreshadowing the ACCC’s submission to the Harper Review, Mr Sims said principles including efficiency, universality and clarity are important in determining where competition laws could be improved.

“While the ACCC recognises competition laws must strike a careful balance, and not inhibit healthy competitive behaviour, if competition laws are too weak there are large efficiency and welfare losses from systematically poor conduct,” he said.

Mr Sims nominated Section 46 of the Competition and Consumer Act as a provision that is particularly deficient, and outlined two areas for improvement.

Mr Sims said a key success story of Australia’s competition policy is the integration of competition enforcement, consumer protection, and economic regulation into a single agency with the sole purpose of making markets work as they should.

“Given this common objective the current ACCC structure provides many synergies and economies of scale; it also avoids the many gaps that would arise if these complementary functions were separated; and it avoids the overlap that would arise as the same behaviour could be pursued by more than one agency,” Mr Sims said.

To address Australia’s diminished commitment to competition, Mr Sims said the role of market studies needs to be considered in order to gain an in-depth understanding of how sectors, markets, or market practices are working.

“The inability of the ACCC to initiate market studies using our information gathering powers means we are out of step with overseas regulators, and Australia is losing an opportunity for a continuing competition focus on particular sectors and activities,” Mr Sims said.

“The result of these studies can be enforcement action, recommendations to governments, simply shining a light on particular practices or, often more important, they can explain clearly to the public why there is not a problem,” Mr Sims said.

www.ceda.com.au

www.accc.gov.au

 

ends

Digital disruption year: 2014

SUBSCRIBER EXTRA / 

A DIGITAL business researcher is tipping 2014 will play out as a landmark year in disruption – and the recent industry closures and job losses appear to bear out his analysis.

Digital Business insights (DBi) CEO, John Sheridan, is using his 13 years of research and 50,000 in-depth surveys of Australian businesses  to develop systems and digital tool sets to assist business leaders in developing capability within their organisations.

Mr Sheridan and his team at DBi use the evidence of those surveys to help shape knowledge delivery to business leaders, based upon their individual business profiles, and encourage new collaboration. 

But the research also often throws up accelerative trends, blockages and opportunities that are not following the conventional business, government or educational wisdom.

For example, Mr Sheridan’s research has been predicting a long-term and lasting hit to Australia’s commercial property market, largely because of mobility and the almost universal practice of business teleworking. Online retail has critically disrupted ‘high street’ retailing forever, he believes, and many ‘mum and dad’ retailers will leave the industry forever.

One of the biggest worries for CEOs is where the next challenge will come from. Most now acknowledge that the toughest competition may be yet to come – but some entrepreneur and start-up is likely to arrive out-of-the-blue and gain critical market share with lightning speed.

Australia may not have time to get used to it, but it has no choice but to adapt to it.

“Full time, well-paid jobs will disappear forever in manufacturing, mining, retail, real estate, construction and government only to be partially replaced by a range of government sponsored infrastructure developments,” Mr Sheridan said.

“Digital disruption will continue to pummel all industry sectors. Sixty percent – up from 40 percent last year – of US CEOs worry about competition from new market entrants. And competition can come from anywhere.

“Teleworking will increase steadily promoted by government and office lease vacancies will grow further. They will move from the teens to the 20s in Brisbane, Perth, Melbourne and even Sydney. Retail vacancies will follow the same trend.”

He said all indications were that, between 2014 and 2017, Australia will “haemorrhage thousands of full time, well paid jobs”.

“They will disappear forever,” Mr Sheridan said.

It was plain from the research that the future for Australia rested in start-up businesses that were fleet of foot, highly adaptable, innovative and ready to employ to sustain their high trajectory growth. He said US research showed clearly that established firms tend to shed jobs over time, when challenges strike, but new companies were always where the high job growth actions was.

“And yet, it is the least understood sector and the least supported, especially by government and the banks,” he said.

“Government cut backs and redundancies in Canberra and in other state governments will result in thousands of white collar workers moving into early retirement or possibly starting new business ventures.

“Retraining for the new business environment will be critical.  But what are the new skills required and do the traditional vocational training facilities have the knowledge, vision and capability to train people to be successful in this new world?” Mr Sheridan asked.

“No,” he said. “Independent contracting will grow. No job security or little job security means less borrowing and spending, and more saving where possible. Banks and other finance providers will wrestle with how to rate this new ‘worker’ and manage risk.

“The nature of a job will shift from full time to permanently part time or ongoing contracts. Job security? Forget it.”

Mr Sheridan warned the biggest impact on Australia will be the drop in income levels “as newly redundant workers move from high paying jobs to low paying jobs, if they can get any jobs at all”.

“The baby boomers are now starting to retire in droves, conserving their resources, downsizing and only spending where it suits them,”  Mr Sheridan said. “Retired people save money and don’t spend as much.

“Less money to spend will impact retail, personal and business services even further.

“As interest rates slowly rise again, the housing market will be hit hard. Mortgage defaults will increase. The overall number of people able to buy property will fall further and the price of housing will drop. There aren’t enough Chinese investors to go around.”

Mr Sheridan is living out his own deductions that the digital world offers the best solutions to combatting and working past its own disruption.

“How can we use the internet and web based services in a more intelligent manner to support individuals in this new environment?” he said. “Not based on the presentation of old world 20th century resources and information but really tailored to the new condition – starting with the customer and working back.”

He said the organisations and business leaders who got their heads around this core issue would thrive in the new digital economy.

“The only room for real job growth is in startups. And value adding,” Mr Sheridan said.

“And for them to have any hope of success they will need support. Net job growth – full time, part time, contract, self employed – will come from startups.

“We have to provide the right resources for startups to have more chance of success – the business intelligence, the mentorship and support, the connections and introductions, the export resources and support, the networks – both real world and virtual world.

“The new disruptive condition and business environment is upon us. It isn’t going away. 2014 will be a shocking year.

“Shocks, but also huge opportunities. The two go hand in glove,” Mr Sheridan said.

“It requires cooperation, collaboration and sharing. It requires the putting down of political dogma and the acceptance that the only viable strategy is shared value.

“The old way doesn’t work.”

www.db-insights.com

  • Turn to Business Acumen’s Digital Disruption feature, pages 18-25.

 ends

 

POSTED MAY 2014

 

Can innovation save manufacturing in Queensland? Innovation in tech procurement will sure help ...

By Rowan Gilmore >> 

THE MEDIA has been quick to explain why the last three big car manufacturers are pulling out of Australia. High costs, poor innovation, manufacturing is dying.

Is there any hope for a renaissance among smaller more agile firms that embrace innovative design and smart manufacturing?  

For example, EM Solutions, an innovative Brisbane-based firm designing and manufacturing broadband microwave radios for telecommunications and satellite links, exports more than 70 percent of its products. 

The company recently released the world’s fastest commercial radio transmitter and receiver, for carrying data traffic 20 times faster than the fastest mobile phone. Intended to carry heavy traffic in mobile or internet networks, the radio recently passed its acceptance tests on a trial between Brookfield and Springfield with flying colours. 

Technological innovation is important to compete in an industry such as telecommunications.

But home grown innovation is a tough sell, with our big telecommunications companies content to purchase equipment from large multinationals to reduce their commercial risk.

Innovation is often not enough. EM Solutions struggles to sell its products to large corporations and government agencies here at home, even while blue-chip customers overseas seek it out.

Why?

If taxpayers are spending $40 billion to lay a broadband network across Australia, why aren’t local innovators thriving on the back of that?

If Australian Defence is spending billions upgrading its telecommunications equipment, why is most imported?

It seems our large corporations don’t like to take risks, to work with SMEs, to nurture home grown innovative firms.

Even when prices are lower.

They work instead with accredited suppliers, other large organisations they think are more trustworthy than small local businesses.

One solution to prevent the further hollowing out of manufacturing in Australia is indeed to innovate; but another is for our big corporations to innovate in their technology procurement, and better manage the risk of working with small business.

The Queensland Government (through its Queensland Health payroll fiasco) has learned that ‘buying big’ did not protect it against failure, and is now adjusting its procurement practices to buy from small businesses that innovate. 

Being more innovative in their own procurement is one trend all Queensland corporations should emulate.

www.emsolutions.com.au

 

Rowan Gilmore is the managing director of EM Solutions Pty Ltd and a former CEO of the Australian Institute for Commercialisation. EM Solutions is also a current member of Queensland Leaders, the organisation helping to foster leading companies in Queensland.

ends

POSTED MAY 24, 2014.

 

Insolvencies up: agribusiness and mining services most at risk

 

AUSTRALIAN business continues to endure unprecedented levels of insolvencies and business liquidations and a legal specialist in the sector is warning that conditions are now heavily impacting agribusiness and mining services companies. 

Law firm Henry Davis York (HDY) is warning that a combination of local and global pressures could see the number of domestic insolvencies increase significantly over the next 12-24 months, particularly in the agribusiness and mining services sectors.

According to Mark Schneider, specialist restructuring and insolvency partner at HDY, international uncertainty and increasing international competition is compounding a generally subdued growth outlook for the Australian market. Investment and business activity is yet to return to pre-2008 levels.

Mr Schneider said the agribusiness sector is under significant pressure, particularly due to recent extreme weather events.

“Agribusinesses in Queensland, NSW and Victoria have struggled recently due to the drought,” Mr Schneider said. “However, before this, particularly in Queensland and northern NSW, there was severe flooding.

“Lately it seems the weather conditions have been one extreme or the other, with enormous impacts on cashflow, forward planning and crop prices for those in the agribusiness sector. When coupled with a high Australian dollar and disrupted markets, for example the live export trade, the agribusiness sector has really taken a beating.

“Financiers in the sector will want to review their customers’ positions to protect their exposures and farmers may need to keep in close contact with their financiers to retain their support in these tough times.”

Mr Schneider also drew attention to the mining services sector, which has been held out as propping up the Australian economy for some time now, but is also under increasing pressure.

“A number of mines and associated mining projects are moving from the construction phase to the operational phase and others have simply been mothballed completely as the big miners look to cut costs,” he said.

“This sector has also been affected by fluctuating commodity prices and exchange rates, and now the consensus view seems to be that growth in this sector is slowing.

“In the main, banks with large exposures in the mining services sector have been very considered in working with their customers to address the challenges they face. However the changes in the mining services industry have wide-reaching effects.

“Some businesses have had to deal with a yellow goods market where demand was once so high that second hand equipment was selling for more than brand new equipment, but where there is now no demand and an over-abundant supply of expensive parked-up equipment.

“In addition, there are a host of other businesses in mining areas that are affected by the decrease in activity in this sector, notably accommodation providers and other suppliers to the mines,” Mr Schneider said. 

Mr Schneider said a key trend to watch was the direction of investment into distressed assets.

“It is interesting that there is certainly available capital out there, both domestically and internationally, but there has not been a rush of investment into distressed assets in Australia,” he said.

“This could be for a range of reasons, including because of the perceived value of particular assets, regulatory and structural issues within industries and the relative number of opportunities in other depressed markets, for example, the US, UK and Europe.

“There remains much uncertainty about the global economy and in the meantime businesses in Australia will continue to face the pressures of subdued economic growth and increased international competition.”

HDY specialises in the banking, financial services and government sectors and focuses on ‘tier-one’ insolvency and restructuring expertise. Its latest research into Australian insolvency risks has thrown up the most vulnerable sectors as agribusiness and mining services.

According to HDY, the top five sectors at risk of insolvency at present are:

Agribusiness – because extreme weather conditions have caused significant financial pressures in this sector.

Mining services – with mining projects transitioning from development to operational phases and some projects being scrapped altogether, this has significantly reduced demand and the effects on associated businesses could see some suppliers facing difficulties in the next 12 months.

Manufacturing – the continuing strong Australian dollar and generally high cost of business operations in Australia have led major car manufacturers to announce their departure from the market.  This will have strong flow-on effects to manufacturing suppliers in the auto industry who need to urgently re-tool or restructure their businesses.

Retail – this sector is continually under pressure from online competitors and strongly-backed international retailers entering the domestic market.

Aviation – there are smaller airlines beginning to collapse (such as Brindabella Airlines) matched with continuing speculation around Federal Government intervention for larger players, such as Qantas.

www.hdy.com.au

ends

 

 

Queensland floods cause major damage to agribusiness

The Queensland Farmers Federation (QFF) is still assessing the true damage to the state's agriculture industries from what is now the third major flood in two years for many farmers. 

However for some farmers not directly in the path of floodwaters or extreme rainfall, the storms have broken an intense period of unseasonal drought. But even they are impacted by damage to road and telecommunications infrastructure.

The federation and its member industries have confirmed that rainfall from ex-Tropical Cyclone Oswald has produced flooding comparable to both late 2010 and early 2011.

A QFF spokesman said this placed "serious and significant financial and emotional strain on many farmers, and government support will be required to assist in many instances". In the horticultural sector, QFF is already estimating losses of more than $100 million.

QFF members have reported varying impacts between regions and industries, but generally farms in the path of the flood have faced serious damage to crops and livestock as well as agribusiness and personal infrastructure.

The impact was worsened by the fact that the intense rain and wind squalls followed an unseasonal dry spell from which farmers were desperate for relief. In fact, parts of Queensland are still badly in need of rain.

On a positive note, some farmers not directly under the very high rainfall bands of more than 150mm are now reportedly in a more reasonable production position than they were earlier in the month.

In regions of high rainfall and swollen creeks and rivers, there have been major impacts on crops and livestock - in fact just about all major coastal rivers and catchments along the coast from Central Queensland (Rockhampton and Gladstone), south to the border fall into this category.

Farming regions adjacent inland have also been badly affected, including major horticultural and cotton producing regions.

 

DIRECT IMPACTS

Some intensive animal industries including piggeries and dairies have been cut off and remain isolated by floodwaters. Industry is working to resolve these high risk cases as quickly as possible.

It has been estimated the impact on the horticulture industry could be as high as $100 million.

Major transport disruptions along the Bruce Highway and telecommunications shortages have also caused significant problems for the industry, even for those who experienced lesser direct on farm impacts.

Severe losses have been incurred around the major horticultural region of Bundaberg, and upstream on the Burnett River at the citrus production region at Gayndah and Mundubbera.

The cotton industry has suffered serious damage in some regions, with further flooding yet to come as the flood peak makes its way down the Condamine River.

This peak has already caused major damage on the Darling Downs and is currently comparable to the flood heights of 2010/2011 in places.

The extent of damage to these crops will only become apparent a day or two after the water makes its way down the river and then recedes.

In Central Queensland, the Biloela region has suffered major crop and infrastructure damage on the back of a significant loss in the 2010/2011 floods.

Growers near Murgon have suffered major losses also along with previous flood losses and yield and quality issues last season with rainfall.

There are also reports of some significant damage in the Border Rivers area, particularly from flooding from the Weir River.

With a wide geographic distribution, the cane industry has suffered varying amounts of damage along the coast. It has been hit with flooding in major growing regions, with particularly acute flooding around Bundaberg and Maryborough and the surrounding mill areas.

The full extent of the losses are being assessed and will be known more accurately as the floodwaters recede. Torrential flood waters have caused major damage to infrastructure and crops, and recently planted crops are particularly vulnerable to losses from flooding.

A number of dairies have lost electricity and road access, creating difficulties milking cows. Properties that have been without road access or faced other issues have been forced to discard milk.

Some farms could still face isolation and electricity issues into next week. Infrastructure has been damaged and farms will be facing significant losses. It is estimated that about 50 percent of the Queensland industry is impacted, at a cost of about $40 million.

John Coward of Pork Queensland and also Australia Pork Limited and QFF have been assisting the pork industry with the response.

Mr Coward said about 50 percent of the Queensland pork industry has been impacted. Two piggeries have been severely impacted, with many others facing infrastructure, transport, power and water issues.

One major piggery at Mundubbera lost about 200 sows and approximately 2500 weaner pigs and a second property lost about 95 percent of their herd, with only 12 sows out of 200 remaining and 180 grower pigs out of 2500.

Production nurseries have been impacted on by this extraordinary weather from Gladstone to the Tweed River including areas in the Burnett, Lockyer Valley, Toowoomba and Granite Belt regions with complete inundation of businesses occurring in Bundaberg and along the Logan/Albert River systems. 

The cost of this event is being felt by industry in crop, infrastructure and equipment damage and losses, inaccessible markets and/or lost markets, staff retention costs and in the general clean-up, all contributing to significant pressures on cash flow and business viability. 

Nursery and Garden Industry Queensland (NGIQ) estimates the cost of this event will run to the many millions of dollars as industry starts to recover. 

Many farms in the path of the flood have faced direct infrastructure or household damage or both.

 

ASSISTANCE

Category B disaster assistance under the Natural Disaster Relief and Recovery Arrangements (NDRRA) was enacted for a number of local government areas. This scheme offers concessional loans and freight subsidies for primary producers and small businesses.

Given the extent of the disaster, industries are also working with the government to enact Category C measures, as was the case with the previous flood of 2010/2011. Agriculture Minister John McVeigh said he was looking at Category C measures for the worst-affected shires.

Category B assistance is now in place for:

  • Banana Shire Council
  • Brisbane City Council
  • Bundaberg Regional Council
  • Fraser Coast Regional Council
  • Gladstone Regional Council
  • Gold Coast City Council
  • Gympie Regional Council
  • Ipswich Regional Council
  • Lockyer Valley Regional Council
  • Logan City Council
  • Moreton Bay Regional Council
  • North Burnett Regional Council
  • Redland City Council
  • Rockhampton Regional Council
  • Scenic Rim Regional Council
  • Somerset Regional Council
  • South Burnett Regional Council
  • Southern Downs Regional Council
  • Sunshine Coast Regional Council
  • Toowoomba Regional Council
  • Western Downs Regional Council.

Mr McVeigh said he may seek to extend assistance to other shires as the full picture of the flood damage emerged.

http://www.qff.org.au/

Farmers seeking assistance:http://www.daff.qld.gov.au/ or call 132 523.

ends

Queensland businesses still affected by 2011 natural disasters reveal bank, insurer ‘let-downs'

Queensland's forgotten businesses, still dealing with the aftermath of the 2011 floods, may have initially been helped by their banks and insurers but now in many cases find themselves let down by insurance and ‘surcharged' by their banks.

Image
The water may have subsided, but last year's Queenslsand floods are still hurting businesses.

 

Business Acumen research has found many cases of insurers providing little information for many months before delivering ‘the bad news'. One business owner felt it was a tactic by his insurer to let the issue "go out of the spotlight" so this common practice received no media coverage.

Several businesses that have been denied assessments so far, a year on, could still go to the wall. But business owners are reticent to go public while the issue is still in negotiation as they fear a backlash from their insurers and banks, with loans usually needing to be secured by business insurance.

Several business owners have found that selling assets to reduce monthly outgoings has been exploited by their banks insisting on early payout fees on leases - and in most cases this has amounted to payments of thousands of dollars.

"You do the right thing, at their advice, and sell vehicles and things to reduce outgoings -- and you get slugged by the bank over and above," said one business owner who did not want to be identified for fear of recrimination. His early payout figure on vehicle sales totalled more than $10,000.  

"It stinks," he said. "We are forgotten now."

Chamber of Commerce and Industry Queensland (CCIQ) research has shown that many Queensland businesses are still significantly impacted by the natural disasters of early 2011 - and many have been let down by their insurers after very lengthy periods of assessment.

In the CCIQ report, Six Months on from Queensland's Natural Disasters, CCIQ indicated that three out of five businesses which made an insurance claim were still waiting for the claim to be settled. CCIQ's new  ‘one-year-on' analysis revealed that as time went on more businesses discovered that they had been more greatly affected than they had initially anticipated.

The results confirm the concerns of a survey in February last year by CCIQ that warned job losses from the floods in the longer term would be significant and many businesses would struggle to recover without sufficient support from authorities and insurers.

CCIQ's initial survey in late January 2011 found one in five businesses in Queensland had to close as a result of the floods due to full or partial water inundation, loss of power or being cut off from their business. The average number of days businesses were forced to close was eight and the average number of days before a business returned to normal operations was 31 days.

The loss to property including plant and equipment, stock, buildings and motor vehicles to those businesses directly affected by the floods was on average $589,000. In the months following the natural disasters, businesses were experiencing difficulty finding out from their insurers where they stood in terms of claims and subsequent results have shown insurers have taken many months to deliver new - especially bad news.

CCIQ president David Goodwin said one of the key findings following the natural disasters was that businesses did not have to be directly impacted by the floods to have experienced a significant and serious financial impact. Furthermore, a noticeable trend was that as time progressed, more businesses came to the realisation that the indirect impact of the floods on revenue had been much greater than first anticipated.

There are also a number of outstanding issues that continue to impact on many businesses, particularly unsettled insurance claims.

For many businesses, the indefinite delay in claim payouts has effectively resulted in being non-insured in terms of ensuring business viability.

Overwhelmingly businesses have also indicated a need for a standard definition of flood, insurance policies that are clearly and plainly written for ease of understanding and the need for earlier payouts with the introduction of a fixed period for assessing claims.

Queensland businesses generally gave positive feedback to CCIQ on the assistance provided by the State Government. The primary assistance measures accessed by businesses were the $25,000 Special Disaster Assistance Grant and deferral of both State and Federal Government tax liabilities.

However there were a large number of both directly and indirectly impacted businesses who are critical of their ineligibility to access any government assistance.

CCIQ stressed the importance of the State Government learning from their experiences to ensure a quicker recovery for businesses and the economy in the event of future natural disasters.

BDO partner Marita Corbett said that all Queensland businesses needed to proactively review their insurance, financing and operational systems.

"For many businesses waiting more than six months for an insurance claim to be settled could be the last straw," Ms Corbett said. "The aftermath of the floods and Cyclone Yasi demonstrated that many Queensland businesses were unclear as to what aspects of their business were covered by insurance.

"Business owners need a clear understanding of their insurance cover, both for physical assets and any loss of profits or business interruption. If you are not 100 percent sure, now is the time to contact your insurance broker or insurer.  Don't wait until you have to make a claim."

According to Ms Corbett, business recovery plans should be reviewed on a continual basis to reflect ongoing changes in internal and external environments.

"Many businesses reviewed their business recovery plans directly after the floods but probably haven't looked at them since," she said. "Simple elements can bring down a plan if not continually updated and tested. 

"Businesses need to update their database of contact numbers of key personnel, particularly in a mobile workforce. 

"Do they know the location of all their critical contracts for services that may be relied upon during the disaster and recovery phases?

"Testing strategies in simulated environments can provide a valuable insight into how they may perform in a real-life situation.

"There is a cost involved in testing your business recovery plan. But what might be the cost to a business if its recovery plan remains untested and then fails during a time of disaster?"

* More on this issue in the February edition of Business Acumen magazine. Subscriptions: www.businessacumen.biz

http://www.cciq.com.au/

http://www.bdo.com.au/

ends

More Articles …