Drought preparation for small business
Drought in some areas of Queensland has been continuous since 2013. Having a plan in place to cope with drought can help to reduce the impact on your business and help you to recover quickly.
To get back to business sooner, use these 4 stages to help your business manage a drought:
Top 10 tips to manage a drought
Make a plan
Identify your risks and plan what you will do
Review insurances, policies and finances
Check your insurance and finances are adequate to cover your business
Review water usage
Plan how to conserve, maintain and review all water supplies
Plan for alternatives
Plan for alternate water sources and ways to operate
Check with local industry networks and authorities on drought planning
Educate and train staff about water efficiency measures
Connect and communicate with staff, customers, and community
Apply for financial assistance and other business support
Communicate and promote
Develop marketing strategies to communicate with customers and promote positive news or deals
Consider what you've learned and update policies, plans and staff training
Prevent and prepare before a drought
Consider what actions you can take to prevent or reduce the likely effects of an incident and prepare steps to plan for, respond to and recover from unavoidable events.
Make a plan
Develop a business continuity plan to help you prevent damage, prepare for, respond to and recover from a severe weather event.
Complete a business continuity plan to help you prepare, respond and recover from an incident or crisis.
Steps to include in your plan:
- identify key events and risks most likely to impact your business
- plan how to respond to key risks and incidents (e.g. changes to goods or services delivery)
- identify staff roles and responsibilities in an emergency and share team contact details
- identify and record customer, supplier, insurer, and emergency contacts
- identify and record local emergency alerts, warnings and contacts and update channels
- write an emergency evacuation plan and procedures (e.g. identify assembly points, assign roles, shutting down operations)
- conduct regular emergency drills with staff/visitors/customers/guests and document in your emergency plan
- create an event log to record information, decisions, actions, and 'before and after' damage photos for insurance purposes
- create a recovery plan to document steps after an incident.
Prepare your business
When planning for a drought consider alternative ways to operate if water supplies are restricted or unavailable.
- Check insurances are up to date, and adequately cover your business, assets and any rebuilds or repairs that may be required.
- Review and document how you will manage orders and cancellations.
- Check you have financial reserves and emergency cash on hand.
Include specific drought preparation steps in your response plans:
- devise an action plan to conserve, maintain and review all water resource supplies
- check with local industry networks for drought planning guidelines or requirements when developing your plan
- contact local authorities to obtain specific information to help develop drought management strategies for your business
- research local rainfall records (you can use a combination of official records and local experience)
- identify alternate water supplies, consider using non-potable water
- regularly maintain your water consumption sources (e.g. install water-efficient nozzles on taps, check for leaks)
- regularly maintain equipment that uses water
- introduce water saving measures in your workplace.
If water restrictions are declared impacting your business:
- check with your local council to learn about current water restrictions, guidelines and compliance requirements
- install water-efficient appliances or fittings and check for leaks
- introduce water-efficient procedures for your business operations and staff
- use the water restrictions preparation checklist
- educate and train staff about the importance of water efficiency and how it can benefit your business.
- Plan for rising costs of products, produce and water.
- Plan and document how to deal with supply chain alternatives.
- Read how to respond to supply chain disruptions.
Respond during a drought
- Activate your business continuity plan (which includes your response plan).
- Look after the mental health and wellbeing of your staff and family, as well as yourself.
- Consider alternative roles or tasks for staff.
- Provide staff, or customers (where applicable), with information about heat stroke or heat-related illnesses in heat wave conditions.
- Stay connected to your local community, industry and neighbouring businesses.
- Remember it's okay to accept assistance, even if you think others are worse off.
- Review your business continuity plan (includes recovery plan).
- Assess the impact on your business and measures you can take to adapt your business (e.g. diversify products and services, reduce services, move online).
- Communicate regular updates to staff.
- Advise customers and suppliers about your business operations.
Recover after a drought
Having a plan to respond and recover from a drought can help your business to survive long-term.
- Contact your insurer or bank for emergency funds or recovery activities.
- Assess your finances, cashflow and break-even point.
- Consider the viability of your business – should you rebuild or exit your business?
- Find out about drought assistance programs (e.g. farming drought assistance).
- Work with your accountant, lawyer or advisors on credit and repayment plans.
- Speak to a free financial counsellor on 1800 007 007 or rural financial counsellor on 1800 900 090.
- Contact your bank, creditors and debtors to discuss options.
- Contact the Australian Taxation Office (ATO) to learn about assistance dealing with disasters, how to fast-track your refund, delay lodgement obligations or more time to pay debts.
- Access small business support services to get back on track, including the Mentoring for Growth program.
- Continue updating customers and suppliers about your business operations – use our suggested messages.
- Consider how to promote your business.
- Celebrate and let people know about any positive news.
- Post videos, photos and promotions on your social media to demonstrate when your business is back up and running.
- Connect with your local community, neighbouring businesses and disaster recovery centres to find out how you can help your community, or they can help you.
- Accept volunteer and community support – people want to help and you are not alone.
- Consider how to reduce the impact of future events on operations.
- Record lessons learned (adequacy of insurance policies and IT, accounting and record-keeping systems).
- Update your business continuity plan annually (includes risk management, incident response and recovery plans).
- Coordinate routine emergency training with staff at least annually.
Communication can be crucial during a drought. Your staff and customers need to know if the event has impacted your business, if you will close, and if so, when you will reopen.
Consider who your business might need to communicate with before, during and after a drought.
Key stakeholders may include:
- customers or guests
- suppliers and distributors
- banks and insurers
- industry body or association
- regulatory body or agency.
Before a drought
Ahead of a drought and water restrictions you should talk to your staff face to face about water efficiency and phone or email your key customers, clients or suppliers who may be directly impacted.
During a drought
If your business is responsible for looking after guests or customers, make sure you advise them about water efficiency measures.
After a drought
If available, use your social media accounts, website or phone to advise customers and stakeholders about your business operations.
- We are committed to water conservation. In an effort to conserve water resources we ask you to do the same.
- (insert town, city, regional area) is currently experiencing drought conditions, with water levels lower than usual.
- To respond to the situation, we have introduced water restrictions.
- This means residents and visitors can only use a maximum of (x number of) litres per day.
- This is the equivalent of (x number of) litres.
- To help conserve water, we recommend having (e.g. 2) minute showers.
- We have been following authorities' advice and plan to reopen our business as soon as it is safe to do so.
- We wish all of our customers and clients a safe recovery.
- We are delighted with the rain to our area but are aware this rain has not broken the drought across all areas in Queensland.
- These rains will make a big difference for our business allowing us to (provide details).
- Please be patient as we work to resume full operations.
- You can continue to contact us on (provide details).
- We are now open for business and ready to welcome our customers back.
- Please be patient with us as we work to resume full operations.
- You can continue to contact us on (provide email/phone details).
Contact your bank
- Ask your bank about financial hardship options, for example:
- changing loan terms
- temporarily pausing or reducing repayments
- deferring repayments and interest payments (all missed payments and interest will need to be repaid)
- waiving fees and charges
- consolidating your debt
- finance to help cover cash flow shortages
- deferring upcoming credit card payments
- increasing emergency credit card limits
- waiving early termination fees to access term deposits.
- Provide loan details (account name and number, payment amounts) and an overview of your financial situation.
- Request a hardship variation by using the sample letter generator from the Financial Rights Legal Centre to send to your bank.
- Your bank must advise you within 21 days about your hardship request. If you can't negotiate a variation, you can:
Contact utility providers
- Contact your utility providers' hardship team about electricity, gas, phone or water bill payment options.
- Contact your insurer if you:
- aren't sure the event is covered by insurance – you may be able to claim under your business interruption or income protection insurance
- have lost your policy documents – your insurer will have a copy.
- Contact the Insurance Council of Australia (phone 1800 734 621) if you have questions about your policy or don't know who your insurer is.
- Check your insurance policy:
- review your cover
- provides emergency or advance funds for wages or recovery activities.
- Gather all information about the claim:
- complete an event log
- items to claim and when purchased
- photo and/or video evidence.
- Make a claim and resolve issues:
- lodge claim as soon as possible – don't wait for a full damage assessment before making a claim
- insurers must fast track a claim if you can demonstrate 'financial need' (read item 64 of the General Insurance Code of Practice) – if the insurer agrees, an advance payment must be made within 5 days
- your insurer must inform you of their decision within 10 business days of receiving your claim
- contact the Australian Financial Complaints Authority on 1800 931 678 if you can't reach agreement with your insurer
- phone Legal Aid Queensland on 1300 651 188 if you need information and advice on how to get a claim paid.
- lodge claim as soon as possible – don't wait for a full damage assessment before making a claim
Go back to Small business disaster hub for other industries and disasters.
- Last reviewed: 17 Mar 2021
- Last updated: 17 May 2021
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