So your business is more organized and you have a focused business strategy; now it may be time to develop a disaster recovery plan.
Yes, we’ve done a couple of these posts on having a disaster recovery plan in place, but that’s because this is important. Great plans include making the most of your resources and opportunities for growth while being acutely aware of the risks and challenges so you can minimize trouble by having a well thought-out recovery approach.
According to research by the University of Texas, only 6% of companies survive a catastrophic data loss, while 43% never reopen and 51% close within two years. In spite of those shocking statistics, Gartner Research estimates that only 35% of small and medium businesses have a comprehensive disaster recovery plan in place.
It might feel like focusing on the negative, but it’s just good business to be prepared. Companies that create disaster recovery and business continuity plans proactively do so hoping they will never have to use them. Whether “disaster” is defined as natural, such as a flood, snowstorm or hurricane, or man-made, such as the loss of power or networks due to an accident, the event can potentially have a significant impact on your business.
Each year, downtime costs our economy tens of billions of dollars. Researchers estimate that companies lose, on average, over $80,000 for every hour of downtime. And this is just the direct cost. Bad publicity, loss of morale, loss of customer goodwill and, potentially, the loss of brand value is at stake. Yet many enterprises put off implementing company-wide disaster recovery plans until it’s too late.
The first step when designing a disaster recovery plan is to identify your key assets and resources. Think about it: exactly what would you need to ensure continuous service to your customers in the event of a disaster? Decide what software and equipment your business needs to continue operations, and make a detailed list that includes service contract and warranty information. Speak with your insurance agent and suppliers, and purchase business insurance policies that provide the protection you need. Make a list of all pertinent phone numbers for local authorities and utility companies, suppliers and vendors.
Next, ascertain what information is absolutely critical to your daily business operations. For example, gather your customer database and all contact information along with purchase histories and any important proposals or presentations. Run detailed accounts payable and receivables reports. Create an essential document file and include duplicates of important business records such as insurance policies, leases, equipment rentals, equipment purchases and personnel files. Take steps to protect these files in a secure offsite location and also back up your data in the cloud.
As part of your disaster plans, formulate a communications plan and identify key individuals who will be responsible for contacting customers, vendors, partners, investors, creditors and the media (if needed). There should be only one leading communication officer who should present one cohesive message and reduce possible confusion that may occur post-disaster.
These are just a few suggestions of what to include, but it’s important to note that your disaster recovery plan needs to be an ongoing process that changes as your business changes.
The U.S. government provides many free resources to assist companies and individuals in developing their business disaster recovery plans. Along with the U.S. Small Business Administration, the government provides free assistance through SCORE, Ready and FEMA.
If you have a disaster recovery plan in place, please share what is in your plan that we didn’t mention.
Editor’s note: This article first appeared in Verizon’s Small Business eNewsletter. To receive a free copy of future eNewsletters send an email to email@example.com. Give our eNewsletter a new name and win $1,000 – enter by March 6, 2012. Click here for more information.
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