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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:
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:
Percentage of Canadian small business owners who do not have a contingency plan for a business interruption, by region:
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.
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.
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