Is your bottom line ready for the worst? Disaster preparedness for your business.
by Benjamin Gran
Extreme weather seems to be in the news more frequently than ever, with deadly tornados, winter "polar vortex" storms and hurricanes destroying homes and disrupting everyday life in cities throughout the U.S. These weather disasters can cause serious damage to businesses, and, according to the Small Business Administration, even closure 25 percent of the time.
The definition of “disaster” goes beyond fire, flood and storms. Manmade disasters can happen as well, such as theft, vandalism, data breaches, systems failures and loss of crucial company data.
According to a 2014 survey by BUMI, a managed service provider specializing in data backup and recovery for small and mid-sized businesses, 88 percent of IT consultants say their clients currently have some type of data backup and recovery strategy in place, but 39 percent do not believe their clients are truly prepared for the worst large-scale disasters or outages. Other studies suggest small businesses are even less prepared. According to a 2013 survey cited by Iron Mountain, 74 percent of small businesses have no disaster recovery plan.
Evaluate Your Risk
Jennifer Walzer, CEO of BUMI, said small business owners need to ask themselves some provocative questions to begin a more effective disaster plan.
“If you were to go into your business tomorrow and everything was gone, what would you do?” said Walzer. “From an IT perspective, what would you need to focus on first in order to get your business back up and running quickly? The answer to this question provides the blueprint for how businesses should prepare for disaster recovery.”
Walzer encourages small business leaders to focus on the three main categories of people, communications and data, and what each would require in the event of a disaster.
“Think about what you would need to have in place if you couldn’t use your office, phones, or computers,” she said. “Hosted phone services and Voice over IP phone systems provide flexibility because they are not premise-based, giving employees the capability to work remotely and plug in and be fully functional.”
Neal Bradbury is the VP of Channel Development for Intronis, a cloud backup and disaster recovery company. He encourages small business owners to think carefully about how long could they go without Internet access or access to customer data. These considerations will enter into your overall disaster recovery plan because business owners need to be able to direct their disaster recovery solutions providers to get the business up and running within a specified amount of time.
“A small grocery store with multiple locations that uses a point of sale system might not be able to have the computers down for more than 10 minutes,” said Bradbury. “The dry cleaner down the street might be able to run on paper receipts for a full day.”
Knowing how much a disaster could cost your business can help you plan the scale of your plan. According to a report from CIO Insight cited by Iron Mountain, corporations lose an average of $90,000 for every hour of downtime. A 2011 survey from CA Technologies cited in Information Week found that small businesses lost an average of $55,000 in revenue due to IT failures each year.
Create a Disaster Plan
There are many different disaster recovery planning templates small businesses can use. These templates will help you identify which aspects of your company are business critical and which systems, people or operations would need to be restarted, relocated or rerouted in the event of a disaster in order to maintain continuity of your business.
Barbara Goldberg, CEO of Back on Track Solutions, a business consulting firm specializing in Disaster Recovery and Continuity Planning, said there are a few things to think about when small business owners are developing a disaster plan:
- Identify what the business needs to protect itself should a disaster strike. This includes protecting assets if the business is located in a building.
- Determine what equipment is needed to keep the business up and running, and, if feasible, move that equipment to an alternate location.
- Create a list that contains contact information for customers, vendors, suppliers, as well as other useful phone numbers that might be needed, such as utilities or insurance companies. This information can be stored in the cloud for easy access.
It’s difficult to generalize about the “right way” to do disaster planning, because every business is different and requires a customized plan.
“Disaster recovery plans can get complicated as businesses approach 25 or more employees,” said Bradbury. “Then the cost of being down for an hour or even a day really begins to add up and thousands of dollars in lost productivity can quickly become a reality.”
Anticipate Your Recovery Needs
Preparedness isn't just about backup, but also recovery.
“Business owners need to ask, how will your provider give you the recovery solution you need to get yourself up and running quickly?” said Walzer. “Just having access to download your data somewhere won't help you if you need to have multiple employees accessing it at once.”
It often takes some time to recover data in the event of a disaster or power failure or outage – and if the recovery time is longer than your business can handle, your data recovery provider needs to be able to keep your business running even while your data is being recovered.
“A solid data recovery provider will also provide options to failover your data (i.e. switch to a standby computer system) so that you can continue working regardless of the disaster,” said Walzer.
Practice the Plan
Do disaster preparedness drills. The best disaster recovery providers will offer options to work with you on repeated testing and disaster recovery drills to make sure everything works the way it’s supposed to in the event of a disaster.
“At BUMI we work with clients on disaster recovery drills to ensure that when a restore is performed, all of the applications and data that are needed are fully operational,” said Walzer. “It is prudent to do this when you have full control over your environment rather than during an outage or disaster.”
Evaluate Your Insurance Needs
In addition to data recovery and online backup services, there are also financial and insurance aspects of disaster recovery that business owners need to do now to be prepared for the worst. Most business insurance will cover physical damage from a disaster, and some policies will reimburse for issues related to failed servers and other IT problems, but check with your insurance broker to make sure you’re covered with an up-to-date policy that reflects the full spectrum of costs and risks facing your business.
Also, every company should have designated cash savings to cover the costs of disaster recovery services or related expenses involved in recovering business critical data.
“An insurance policy can help find a new building, buy new hardware, and pay salaries of employees, but no insurance policy can replace your digital records,” said Bradbury. “Good backups and basic disaster recovery planning are a necessary type of insurance needed in today’s technology driven world. As a first step, protect your invaluable data, and if you don’t know how, find a trusted IT Solution Provider.”
About This Author
Benjamin Gran is a full-time freelance writer specializing in blog articles, white papers, technical writing, speech writing and other business writing.
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Important Legal Disclosures and Information
Small Business Administration:http://www.sba.gov/content/disaster-planning
BUMI (“Backup My Info!”) website:http://www.backupmyinfo.com/
BUMI Study on Disaster Planning:http://bumi.com/press-releases/independent-study-by-bumi-shows-88-percent-of-respondents-have-a-disaster-recovery-plan-yet-less-than-half-are-properly-prepared-for-an-outage/
BUMI (“Backup My Info!”) – sample checklist for disaster planning: http://go.bumi.com/hs-fs/hub/158434/file-370106803-pdf/docs/BUMI_dr_checklist.pdf?submissionGuid=6b0f16ec-91f7-4dcc-8d1a-3b076949874e
Back on Track Solutions:http://getbackontracknow.com/about-us/
Article citing CA Technologies Survey on Cost of Downtime for Small Businesses:http://www.informationweek.com/it-downtime-costs-$265-billion-in-lost-revenue/d/d-id/1097919
Iron Mountain – statistics on disaster recovery:http://www.ironmountain.com/Knowledge-Center/Reference-Library/View-by-Document-Type/General-Articles/W/What-or-Who-Is-Holding-Up-Your-Disaster-Recovery-Plan.aspx
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