Two out of every five small businesses struck by a significant disaster never resume operations.
Be it natural, or caused by humans, a crisis can easily overwhelm a large company, let alone a corner store or a small firm. That's why 40 percent of small businesses can't get back on their feet after a catastrophe, according to the Insurance Information Institute of the Department of Homeland Security.
Problems simply cascade. Interrupted supply lines lead to interrupted workflow. Customers are disappointed and business lost. But a physical loss can often be replaced. Data? That can be gone forever, and with it the backbone of a small company.
Before the worst hits you, consider preparing with a risk assessment, a ranking of priorities, and perhaps an in-house disaster committee.
To get you started, here are five questions to help prepare any small business for the worst.
1. Who should sit on your disaster recovery committee?
Tech support should be first one your list. Crucially, this is someone who knows how to access backups and ensure security systems are in place. They should also be able to get your network, i.e. your business, running quickly and seamlessly.
“You're definitely going to want to have a technical representative on that committee," says Leif Holtzman, chief operating officer of TekDoc Solutions, a Boston-based IT services provider. "Someone who's got expertise in knowing how to prepare your IT specifically for a disaster."
2. Do you have redundant, geographically diversified backups?
In English? This means make sure your data is stored off-site — and presumably not next door. Maintain copies of your data in a variety of locations. One of these should be in the cloud, say experts. If a flood or other natural disaster hits, you want backups that won't be affected.
But weather and power failures make up about a third of the major causes of outages and data loss, according to The Disaster Recovery Preparedness Council's 2014 Annual Report. Almost half the time the problem is a software or network failure, or human error.
An estimated 20-30 man-years of work were reportedly almost lost when someone accidentally deleted the master copies of Pixar's “Toy Story 2" characters, sets and animation. Luckily, so she could spend more time with her children, the technical director had transferred copies to her personal computer.
3. How fast do you need to retrieve your data?
Fast. An average outage, say if the electricity is out and data is down, is 200 minutes, according to research firm IT Process Institute. And as we mentioned in “Build Your Small Business Disaster Plan," a small business can lose $8,000 for every hour offline. A natural disaster that strikes can keep that clock running a very long time.
Bandwidth is key to how soon you can be back up and running. So make sure you have fast connections, which may mean an upgrade to your Internet speed today.
Putting a price on risk-assessment means determining how much downtime your small business can sustain. “The shorter your recovery time objective is, the shorter you are willing to be down, the more intensive and costly a particular solution will be," says Holtzman.
4. Should you test your company's disaster recovery plan?
Putting your plan through the paces before something irreversible happens is crucial. Two out of three firms surveyed failed their own disaster recovery plan, when they tested it, according to the 2014 Disaster Recovery Preparedness Benchmark Survey.
Practice pulling data off your backup to make sure you know how to do it and how long the process will take. Include a remote real-time monitoring system. This will let you know that everything is being backed-up, alerting you if there is a failure, suggests TekDoc Solutions' Holtzman.
5. How quickly should you get in touch with clients?
The worst thing a small business can do in a disaster whether natural or data driven — is to lose touch with their customers. If emails can be accessed, send them. Calls to your best clients aren't off the table either as a way to protect your small business.
Even a note on the front page of your web site can be enough to get a message to customers. Tell them that you are aware of a problem, and are working to solve the issue. If you can remotely access a site, head to Kinkos or a friend's office to upload information. Ultimately, don't disappear on your clients, or they may.