Did you know that “20 percent of business experience a failure (fire, flood, power outage, natural disaster, etc.) in any given year, and 80 percent of those businesses will go under in just over a year”? That got your attention, didn’t it? Many business owners think disaster will never affect them, but you can’t deny that a 1 in 5 chance year over year is alarmingly high. But what can you do about it? Being prepared is the first step to dealing with disaster, and it’s where every business owner should start.
When (not if, when) disaster strikes, your business is in an incredibly vulnerable spot. Whether it’s due to hardware damage, lost sales, or wasted employee hours, a single hour of unplanned downtime costs small and medium-sized businesses an average of $20,000. Yep, you read that right. A full 8-hour day of downtime can easily cost your business more than $150,000. That’s a huge loss. One in five businesses experience this kind of hit, and 80% of those that do will close their doors within a year after a disaster. If that’s not enough to get you listening, we don’t know what is.
Dealing with disaster isn’t about crossing your fingers and hoping it doesn’t happen to you. It’s about being prepared. So in this article, we’ll walk you through the most important areas to consider when preparing for a disaster and preventative measures you can take against loss, damage, or both.
So, what’s really at stake during a disaster?
The short answer is: a lot. To start, businesses face extreme financial risk during a disaster. But a monetary hit is only one piece of the problem. Here are a few areas to consider when preparing for disaster:
1. Hardware Damage / Loss
Whether due to a natural disaster like a flood, tornado/hurricane, or fire, or caused by an unexpected power surge, damage to your business’s hardware can be devastating. Any kind of hardware—computers, POS systems, card readers, displays, etc.—are always at risk, but ensuring they’re protected can save your business big in the long run.
2. Data / Software Loss
Your business’s software and data are at risk in a different way when it comes to disaster. Natural disasters only account for 1% of data loss, while other causes like hardware failure, human error, security breaches, and viruses play a major role. Internal business data, customer data, and costly software are all at risk, but unlike damage to your hardware, data loss is completely preventable.
3. Security Breach
Most people think of natural disasters when they think about disaster recovery, but the reality is malware attacks and viruses account for a huge percentage of disasters businesses face. Security breaches put your business’s internal data at risk, as well as confidential customer information. Cyberattacks that result in stolen customer information most often lead to costly lawsuits that are another added financial burden from a disaster.
4. Cost of Downtime
Obviously hardware and software costs are a huge factor in the negative effects a disaster can cause. But another thing to consider is the cost to your business during downtime. Whether it’s from lost sales, wasted employee wages, or a loss of digital work that has to be re-completed, the cost of downtown for your business often far outweighs the cost of hardware and software losses.
5. Diminished Reputation
Last but maybe the most important factor to consider in preparing for a disaster is the reputation of your business. A single disaster not only halts your business’s typical processes and affects your internal infrastructure, but it also affects the long-term reputation of your business. Data breaches possibly pose the highest risk for this kind of hit to your reputation, but even a single day of downtime can cause potential customers to look elsewhere for the services or products you offer when they may have otherwise chosen to support your business. Missed opportunities for customer conversion are detrimental to your business and play a huge role in businesses closing their doors after a disaster.
Okay, I see the risks now. But what can I do to protect my business?
Effective preventative measures make a major difference in your business’s ability to deal with disaster. Taking simple steps to protect your hardware, software, data, and processes will significantly increase the continuity of your business when disaster strikes. Our list below isn’t exhaustive by any means, as each business has its own unique risks and applicable preventative measures, but we’ve compiled a few of the most critical preventative measures to take to prepare you for disaster.
1. Identify the Risks
The best place to start is to make a list of all possible risks your business faces. (Side note: there are a lot.) From there, you can begin to compile a more comprehensive list of necessary preventative measures and construct a better idea of what you’re up against.
2. Backups, Backups, Backups
Did we mention backups are important in disaster prevention and recovery? Well, they are. Keeping regular backups of your data is the most fail-proof way to ensure your business can be back up and running quickly after a disaster. We suggest keeping multiple backs: one in the cloud, and at least one physical backup stored in a place that is secure against fire, flood, electrical damage, theft, or any other kind of disaster you can imagine. Cloud backups should be made daily, at the minimum, but physical backups can be made less frequently.
3. Invest in Security, Protection, & Insurance
Did you know 1 in 3 businesses are affected by a virus or malware within a three-year period. If you’re planning on being open longer than three years (we’re sure you are), safeguarding your hardware against viruses and malicious attacks is an absolute necessity. But online security isn’t the only way you can protect your assets. Physical security is another way to prevent against a common disaster: theft.
Despite the digital and physical security measures you can put into place, nothing can completely safeguard your equipment against natural disasters such as fire, flood, or tornadoes. However, comprehensive insurance on your hardware can ensure your business is financially able to replace equipment when it’s damaged or lost. Additionally, installing simple devices such as surge protectors and battery backups can protect your hardware from power surges and your software from loss due to power outages.
4. Train Your Staff
Training your staff against common threats like cyberattacks and hardware failures is a critical part of preventing disasters from occurring. Many common disasters are outside of your control, but just as many are well within your control to prevent. Taking steps to train and regularly educate your employees on preventative measures against disasters is a must.
5. Organize & Store Software / Hardware Documentation
Maintaining a secure location to store all your hardware and software documentation is a simple yet effective way to speed up the recovery and restoration process after a disaster. Be sure your employees also know where this documentation is stored and are able to access it in case of emergency.
6. Outline Recovery & Restoration Processes
Beyond preventative measures, it’s also necessary to create a recovery and restoration process for each potential risk. Preemptively thinking about the steps to recovery before a disaster occurs will help your business be as prepared as possible when something unexpected happens. After all, running a business is nothing if not filled with unexpected twists and turns.
7. Create a Comprehensive Data Recovery Plan
A reliable and effective Data Recovery Plan is the only way to fully protect your business from the effects of a disaster. A strong Data Recovery Plan outlines all preventative measures to safeguard against disaster where possible, lays out the necessary steps for recovery and restoration, and includes a communication strategy to ensure your plan can be well executed and that the reputation of your business is protected.
The bottom line is, you need a Data Recovery Plan. Have someone on your team who’s capable of creating one? Download our guide “Creating a Fail-Proof Data Recovery Plan for Your Business” by filling out the form below. If you don’t have the bandwidth internally to create your own Data Recovery Plan, or if you’re feeling unsure about the process, feel free to reach out to us today. We’ll be happy to help!
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