Why does a Business Need a Disaster Recovery and Backup Plan?

Disaster recovery is a daunting task for well-equipped organizations, but even more so for small businesses. Many small business operations do not have well-defined plans in the event of a catastrophe, but can easily formulate a plan. Disaster recovery does not need to be elaborate to satisfy the needs, but simply encompassing and supporting critical operations. The primary goal of most small business operations is to maintain cash flow, and a disaster recovery plan should ensure that it continues.

When a small business owner realizes that a disaster recovery plan may be the key to salvation, they should ask themselves a few questions. First, how much money does the business have to commit to disaster recovery? The budget range is wide, but any funding allocated is better than none. The scope of the operations will also dictate how much of a disaster recovery plan is required. Obviously the needs of a small consignment shop will be different than a medical clinic. Cash devoted to disaster recovery is a guarantee of the continuance of the small business. The next question begs that if no money and no plan are developed, in the event of a disaster, would shutting down the business be more cost effective. This is not a choice many small business owners can or want to make, thus, disaster planning becomes clearer.

The next item to ponder is insurance. An often slippery and confused realm, business insurance is critical to continued operations during and after a disaster. Understanding terms and earmarking cash towards premiums are of chief concern, as well as the application of the insurance after a disaster. Again, the size and nature of the business will dictate how much coverage is needed. Just as home owners and renters should insure their property, small business owners should look at this as a built-in cost to start up the business. Often, business insurance is required by law.

Once a small business owner decides that disaster planning is advantageous, and allocates funding to support it, planning is the next step. A disaster plan, or DRP, should be an encompassing structure that covers most, if not all, disasters and how to protect the business. First, the business owner should inventory all physical assets of the business. This will guide the owner to a realistic insurance policy that covers critical functions, such as continuity of sales. After the physical inventory is complete, a facility inventory, if applicable, should be completed. Again, this should highlight areas that support the critical functions of the business. For example, if the business is a fish market, then freezers and chillers would most likely be critical items to include.

The IT DRP is perhaps one of the most important aspects of disaster recovery today. Computer systems, phone systems, and network for small businesses have special needs, and are unlike those of larger corporations. Often, a small business owner’s Internet Service Provider (ISP) is the same one used at home. Understanding the contractual agreements with the ISP in the service purchased is key to the disaster plan. ISP’s may give priority to businesses after a disaster. As in the steps above, an inventory of all computer and phone system equipment should be made. Additionally, the owner should think about backups and recovery, especially if the businesses’ accounting is done electronically. A simple idea is to back up each system, and store those backups at the owner’s home, as long as it is a physically different location. This is cost effective and could limit the loss of vital data. Cloud computing, in which data is automatically stored offsite, is another recent addition that makes saving backups safe and reliable.

Physical security of facilities during a disaster is important as well. The business owner should research alarm systems, and be well-versed in contacting emergency personnel, such as police, fire department, and emergency medical support. This will not only ensure prompt response to emergencies and disasters, but also may decrease insurance premiums. Many insurance companies provide a discount if an alarm system is installed in a facility.

Disaster recovery has become one of the most critical parts of a company’s operating plan. Since the rise of terrorism, many companies are now devoting funding and resources to planning. While there are many steps to preparing a disaster recovery plan, the return on investment is clear.

Disaster recovery plans do not need to be elaborate, they just need to be in place and practiced, and identify one single question; What is required to ensure that you stay in business after a disaster?