by Art Piccio . July 12th, 2012
Small businesses spend an incredible amount of resources, to ensure that they turn in profits. Well, obviously- profits are what businesses are all about- the rest is just gravy. So maybe it’s not a surprise that most small businesses hardly spend any attention on developing emergency plans and disaster preparedness strategies- even while most would recognize the necessity. Disaster preparedness for small businesses often amounts to nothing more than lip service. Which is borderline insane, considering that disasters happen all the time.
A lot of the time, resources that should be spent on disaster preparation are often channeled towards things that give more immediate returns. Seems logical and it’s much less of a hassle. After all, you don’t really see how emergency planning helps when things go swimmingly. Big mistake.
If you don’t protect your assets – you’re pretty much asking for something bad to happen. You need to make sure you’re prepared for a calamity pretty much the same reasons we use seat belts. While you probably won’t walk away from a major disaster unscathed, knowing what needs to be done during and after the event can save you a lot of time that would be otherwise spent groping (possibly literally) in the dark.
And with the US now in the middle of both the Atlantic and Pacific Hurricane Seasons, disaster preparedness for small businesses should be looked into much more closely.
And I’m not talking about floods or tornadoes either. Man-made disasters such as database and connectivity issues can take a huge toll on the unprepared. Even if you decided to locate your business and all your physical assets inside a bunker (because you’re a fan of zombie movies), it would all be pretty pointless if you lose data critical for your business.
Today, going without computers is hardly even an option. With businesses utterly dependent on computers, we absolutely have to make sure that your data is as secure as it can be. A loss of critical data or online functions can be just as devastating as a natural disaster. Consider these select cuts from a compilation of studies conducted by Edwards Information for HP:
• Companies that experience a computer outage lasting more than 10 days will never fully recover financially. 50 percent will be out of business within five years.
• 70 percent of small firms that experience a major data loss go out of business within a year.
Of companies experiencing catastrophic data loss:
• 43% of companies never reopened
• 51% of companies closed within 2 years
Data loss can just be as devastating to a business as a disaster that causes the loss of physical property, such as a flood or a fire. The funny thing is while almost everyone recognizes the importance of backing up critical data, very few actually bother to do it. In September 2002, Harris Interactive surveyed 597 computer users for Imation. They found that only one-in-four small businesses regularly back up their files- and about 9% never do. This doesn’t even include those who don’t back up often enough for it to matter.
Fine, you back your files up on a regular schedule- great. When was the last time you had a fire or earthquake drill that wasn’t a complete joke? Us neither. Darned if I could remember the difference between red and green fire extinguishers when it’d actually count.
If you’re still not convinced it’s worth it, consider these other facts about Small Business survival for all types of disasters:
• 80% of companies that do not recover from a disaster within one month are likely to go out of business.
• 75% of companies without business continuity plans fail within three years of a disaster
• Companies that aren’t able to resume operations within ten days (of a disaster hit) are not likely to survive.
• Of those businesses that experience a disaster and have no emergency plan, 43% never reopen; of those that do reopen, only 29% are still operating two years later.
Yup. Those odds look pretty bad. Developing the right emergency plans and disaster preparedness strategies is a no-brainer. Science!
So at this point it’s pretty clear that responsible small business owners should do a few things at the very least:
• Back up data on a regular basis. If this hasn’t sunk in yet, please stop reading. All hope’s been lost.
• Make sure everyone in the enterprise knows exactly what to do in case of a disaster. Drills are corny, yes – but knowing exactly where the emergency exits are and knowing exactly what to do when bad things happen will save you a lot of time – and make it more likely that lives and critical assets are saved as well.
• Have concrete preparations ready for disasters that are likely to strike. Keeping your work sites up to code (at the very least.) comes to mind. Some common sense would be in order. A business in Hawaii for instance, would probably not have to worry as much about tornadoes as one in the Midwest.
• Have back-up power available – at the very least for systems critical for your business.
The Small Business Administration offers additional advice “Make back-up copies of all tax, accounting, payroll and production records and customer data on computer hard drives, and store the records at an offsite location at least 100 miles away. Important documents should be saved in fireproof safe deposit boxes.”
With improved (and arguably safer) cloud computing and affordable remote data storage now a fact of life, there’s pretty much no excuse for getting caught unprepared.
Arthur Piccio manages YouTheEntrepreneur and has managed content for major players in the online printing industry. He was previously BizSugar's contributor of the week. His work has appeared multiple times on The New York Times' You're the Boss Small Business Blog. He enjoys guitar maintenance and reading up on history and psychology in his spare time.