As a business owner, you don't want the first time you think about disaster recovery to be during an actual disaster. After a fire, flood or data loss, being prepared will hopefully decrease the damage done by the event, and get your business back on track sooner.
One of the best things you can do to prepare yourself is develop a disaster recovery or business continuity plan.
"Small businesses are vulnerable to failure when they're impacted by significant events," said Ken Katz, property-risk-control director at Travelers. "You'll need to recover in a timely fashion, because your fixed costs continue even when you can't open your doors." [See Related Story: When Disaster Strikes, Entrepreneurs React in Surprising Ways]
Factors to consider
If you don't plan for a disaster before it happens, you'll have to do it on the fly and make decisions when you're stressed, Katz said. But what should actually go into your plan?
John Wise, CEO of Investcloud, a provider of cloud-based financial software and apps, said that disaster plans should assess and create plans for different scenarios both short and long term.
"They should detail key leaders and decision makers, backups and alternative forms of communication if cell towers go down or there is no power," Wise said. "It's ideal to have two alternate data centers — one close to access in person, and one far in the event of a larger-scale disaster."
Thomas Phelps, CIO and VP of corporate strategy at enterprise content management company Laserfiche, said business owners make a few key mistakes over and over in their emergency-preparedness plans:
- Not accounting for loss of critical people nor planning for the stress and trauma of staff
- Not making the emergency plan accessible at the office, or making plans that are too generic, too detailed or stale
- Failing to address communication choke points and having PR issues related to recovery
- No alternative emergency operations center (EOC) or recovery sites, or having physical access issues with alternate site
- Believing that outside assistance and insurance will take care of everything
Before you finalize your plan, be sure to address these areas, Phelps said.
Creating a continuity plan
Katz recommended the following steps to develop a formal continuity plan for your business:
- Assess your risks. Know the threats that could damage your business, and determine how they might affect you.
- Prioritize business functions. Decide the order in which certain business operations will be restored in the event of an interruption.
- Develop prevention and mitigation strategies. Come up with strategies around the most important functions to prevent and mitigate the types of disasters you may encounter.
When your plan is developed, have your team walk through the steps of your disaster recovery plan to test it out. Ensure that employees know what to do, identify areas that need improvement, and routinely check plans and make updates as needed to account for staff change and lessons learned, Wise said.
"Your employees are critical to your company's success, so it's important to realize this and show that same consideration to ensure their safety," he added.
While this may seem like a lot of things to keep track of, these events do happen, said Katz, and it's best to be ready for the worst.
"It's not often, but given enough time, something will occur," Katz said. "It's not a do-over activity — you only get one chance to do it right. The more you can think through what [a disaster] will look like for your business, employees and community, the more you can help your growth down the road."
Additional reporting by Nicole Taylor. Some source interviews were conducted for a previous version of this article.