#BTColumn – Building business resilience

Some say you can’t blame it on the monkeys this time. They were out drinking beer. Beyond the many memes created to lighten the impact of the situation, another power outage in Barbados, disrupting every aspect of life on the island, is no laughing matter.

For the members and partners of the SBA, what occurred last Tuesday was somewhat ironic, since the association was hosting the launch of the Caribbean Corporate Investment for Resilience (CCIR) Blended Finance Mechanism, with partners from the Pan American Development Foundation in Washington DC. This project, funded by the US Agency for International Development (USAID), is designed to increase disaster resilience in Barbados and the Eastern Caribbean. Some 40 participants from the region joined those at the Barbados Hilton for the presentation of the blended finance mechanism, being introduced to support resilience building among small firms and within communities in our region.

The stark reality of the need for this fund was lived by all who took part in the launch, since during the presentation by one of the partners in Washington, the in-person team was plunged into darkness. No sooner were participants informed that there was another island-wide power outage. While several people used their mobile data to reach the overseas audience to provide an update on the embarrassing situation, several lessons were learned in that short space of time.

Business continuity is the business of every business. This may be apparent to the small firm, but is evident for all business entities. Many in the small conference room at the world-renowned Hilton Hotel exclaimed that a generator should soon be pressed into action to allow the session to continue. This never happened. Checks with the hotel team confirmed that whereas generator power was on the compound, it did not extend to the conference area where the session was being held.

Continuity must be part of every business strategy

Whether it’s the impact of a natural disaster, disruption in the power supply evidenced by Tuesday’s national blackout, cyber security threats or other emergencies that can retard the business’ operations, owners and managers of businesses must invest in continuity plans and strategies to mitigate the risks of business failure.  

With the official 2023 Hurricane Season just a month away, the question concerning our resilience and preparedness compounded by the impact of climate change, is now centre stage on the global agenda, and the Eastern Caribbean region prepares every year for an uncertain future if a hurricane strikes. 

On average, Small Island Developing States (SIDS) suffer yearly losses from storm damage equivalent to 17 per cent of their GDP. The most severe hurricane ever, in terms of per capita damage, hit Dominica in 2017, causing damage equivalent to 280 per cent of that country’s GDP. 

Building resilience requires a change of mindset. Tuesday’s power outage caused by a fault at the Spring Garden plant of the Barbados Light and Power Company should be a wake-up call for the business community. Many businesses were forced to close because of the lack of redundant power generation resulting in loss of revenue, as well as productive business hours.  

Services at the Barbados Water Authority were also affected by the power interruption, and customers in some parts of the island experienced water outages or low water pressure.

There have been calls made for BL&PC to do more to stabilise the country’s energy grid, as blackouts continue to negatively affect business operations. 

Well-thought-out contingency plans lead to the business being able to bounce back with agility. Being conscious of disruptions cannot avoid disaster, but resilience speaks to how quickly the business can bounce back. 

The reality is that ensuring business resilience in the face of any disaster comes with a price tag and many MSMEs do not have access to funding in order to invest in backup systems in the event of disruptions to their businesses. Providing funding for MSMEs into their operations and value chains can ultimately scale their economic growth, sustainability, and resilience, thereby strengthening their communities. Thus, the CCIR Business Challenge fund is one solution that will help to address the capitalisation deficit among small firms.  

This blended finance approach will feature low-interest loans, plus provide technical assistance to businesses. It offers flexible terms, which potentially has the result of lowering risks associated with the repayment of debt.

\In order to qualify, the business must be sustainable enough to receive funding, demonstrate sound current and past operational financial history, have the ability to demonstrate operational projections, have an up-to-date business or project plan, and present its potential impact on the economy and community. Up to USD$100, 000 in loan funding is available for each business, supported by access to technical assistance up to USD$10, 000. 

A special window has been opened for Barbadian businesses to access the Business Resilience Challenge until April 28, after which it will be open to the Eastern Caribbean. 

Recent disruptions have brought these issues to the forefront of our plans for disaster preparedness, and we should hasten to get our houses in order and increase disaster resilience for our businesses. Failure to do this could have catastrophic results.

The Small Business Association of Barbados (SBA) is the island’s non-profit representative body for micro, small and medium enterprises (MSMEs). Connect with the SBA: https://www.sba.bb/sba/