Nationwide Study Reveals Troubling Small Business Statistics

Looks like a disaster waiting to happen…

We all know that common expression and it perfectly reflects my thoughts when I was recently reviewing the results of Nationwide’s 2017 Business Owners Attitudes and Usage Study.

Here are the key findings that I found rather scary:

• Only 20 percent of business owners have built a disaster preparedness kit for their business,
• Two out of three business owners do not have a succession planin place, and
• 45 percent of business owners have been a victim of a cyberattack without knowing it was an attack, yet 75 percent of business owners think a cyberattack is unlikely to affect their business.

“(Business owners) can often believe the myth that ‘it could never happen to me,’” observed Mark Berven, president of property and casualty for Nationwide.

“That’s why it’s crucial business owners remain prepared. Whether it’s planning for leadership succession or enduring an unexpected event like a cyberattack, the viability of businesses across the country is a requirement for a healthy economy that we can’t ignore,” Berven added.

If a natural disaster hits your community or a cyberattack or death hits your small business, it won’t take down the national economy. However, the local impact on you, your family, and your neighbors can be overwhelming and extremely difficult to recover from.

Going back to what Berven said, let me state a fact and ask you a question. First the fact: These disasters are going to happen to business owners this year. Now the question: Why not you?

The only good answer to the question “Why not you?” is to say that you are prepared. When you are sufficiently prepared, occurrences that create disasters for others create a manageable problem for you. Sadly, few business owners can give a positive answer to that questions because:

• Only half have cybersecurity measures in place to protect sensitive information,
• Just 23 percent have a natural disaster preparedness program, and
• 37 percent have a succession plan in place.

Nationwide’s survey of 1,069 small business owners also found a couple of interesting and I believe generally unexpected results.

While Millennials are often the object of criticism in the business and career world, the survey found that they are more likely to appreciate the importance of planning for these threatening events than older demographics. Similarly, African-American business owners are more likely to have plans in place to deal with these issues than their Hispanic of Caucasian counterparts.

Don’t be caught on the wrong side of these statistics – the price is too steep. We know that many small businesses that are hit by natural disasters never reopen. Further, you’re the victim of a cyberattack and customer or employee information gets stolen, it is very difficult to recover from the loss of trust.

And succession planning is extremely critical. Many small business owners depend on selling their businesses to fund retirement and when the time comes to retire there aren’t any “do-overs”! Of course, sometimes circumstances force owners to retire early; that makes early planning even more important.

One final note: I’m sure that most of you know that Nationwide is one of the country’s top small business insurers, but have you discovered its Business Solutions Center? It offers a lot of advice and information on a wide range of topics important to small business owners.