Backup Your Business – Disaster Recovery

There seems to be a never-ending barrage of threats and attacks against our economy, our businesses, and our livelihood. These threats can range from natural disasters to power outages, supply shortages, mobs, inflation, becoming obsolete, and many others.

For many people, these constant threats are considered part of the startup gamble, or a necessary evil that’s just part of the package when owning your own business. But what if I told you that there was a solution to address many of these threats?

While some threats may be unrecoverable, with a little planning, you can make your business fully recoverable in the face of a wide variety of these threats. This is called Disaster Recovery Planning.

Multiple times throughout my career one of my key responsibilities has been to make companies either resilient to or at least recoverable in the face of threats like those listed above. We would often test this at least to some degree by randomly shutting down the power to the facility when it was least expected. This was to make sure we didn’t incur some type of operational loss. If anyone panicked because they lost their work or their data, we knew we still had work to do on our disaster recovery efforts. After all, it was far better to experience these losses in a controlled environment with the ability to quickly get back online, than in a live uncontrolled disaster where the stakes are far more serious. In this article, I will share how what we did to achieve this.

The Need:

These days, the news is filled with talk about natural disasters, political issues, supply chain delays, and much more. Each of these threats carries a high death rate for small and mid-sized businesses. For example, a report by DatabaseUSA indicates that in 2018 there were 37,500 businesses that were forced to permanently close their doors due to natural disasters.

Some conservative figures show that on average, 25% of small businesses don’t reopen following a natural disaster. A report published by CNBC states as many as 40% of businesses never recovers from a disaster.

The Covid-19 pandemic was particularly tough on businesses because of the prolonged closures. According to the Wall Street Journal, this resulted in the permanent closure of roughly 200,000 businesses, putting roughly 6,200,000 people out of work. The Small Business & Entrepreneurship Council estimates that number to be much higher at an astounding 9.4 million small businesses.

So is there anything we can do to minimize the effect of these disasters when they hit? The answer is a clear and resounding YES.

Now as I say that I want to be clear that no amount of planning will eliminate the impact of these and other threats. But there are things that can be done to minimize their negative effects on your business.

Where do I Start?

The term Operational Continuity is defined in Wikipedia as “the ability of a system to continue working despite damages, losses or critical events.” While there are extensive articles and philosophies that can be considered and elaborated on, the essence of Operational Continuity is the ability of a system or business to be either resilient to or recover from without a loss of performance or functional capability.

“Plan for the worst, hope for the best.”

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For example, with several of the businesses that I worked with, our disaster mitigation planning would pose the question of what would happen if we lost power from the grid? The simple solution was to install a local battery and generator that would instantly provide adequate power to the computers and any other critical systems.

In the section below, I’ll provide some of the solutions we used in our disaster mitigation efforts.

The key to disaster mitigation planning is to identify what types of disasters you could potentially encounter. For example, in some areas, flooding is a very real threat. Other areas would consider flood planning a waste of time. The key is simple; plan for the worst, but hope for the best. Below are a few of the most common threats we both planned for and in some cases experienced firsthand.

1. Lightning strikes
2. Tornados
3. Flooding
4. Hackers
5. Supply chain disruption
6. Product/Service Disruption
7. Earthquake
8. Grid power failure
9. Key-man death/disability
10. Critical role transfer

Fortify Your Small Business:

For several of these threats, there are common solutions. This means that by addressing one of the solutions below, you may improve operational continuity in the event of one or more of the threats listed above. Below is a list of some of the more common areas of focus in a disaster recovery plan to improve your operational resiliency and ability to quickly recover if needed.

Backup Power – Depending on your needs this system can take on two different looks. It can be a short-term battery solution that will continue for a few minutes or a few hours after a power outage giving you and your team members sufficient time to save their work and safely shut down their systems. Or it can be a more robust system like a diesel generator that continues to provide power longer term, or at least until you run out of diesel fuel.

Supply Chain Disruption – Different businesses will have different needs and capabilities here. But for a manufacturing business, there are typically two approaches to address this threat. The first would be to carry a reserve inventory of key components or raw materials to span the chasm of the disruption. This approach is typically only used to address shorter disruption periods. Another common solution is to duplicate your supply chain with a second or third supplier so if one supplier goes dark, you can continue to get the materials and components you need to run your business.

Key Man death or Disability – While it may be incredibly uncomfortable to plan for things like this, for the operational continuity of the business it’s essential. One of the best ways to address this is by identifying a chain of succession of leadership that names the person or position that will take over if the time comes and under what circumstances. This chain of succession can address both the leadership of the company as well as the ownership of a business if it’s a small single owner or partnership business. Another solution includes Key-man Insurance which can provide a cash payout if something happens to a key individual in the company. This insurance plan is typically used to fund the company adequately until a replacement is identified and in place.

Recovery Documentation – This is something that most businesses overlook. You and your team have spent countless hours figuring out processes, sources, policies, that make your business run smoothly. If your facility is destroyed by a natural disaster and you have to start over with an insurance payout, you don’t want to start from scratch. If you take some time to document every process, contact, resource, etc., you will save several months if not years in your recovery process.

Data Backup – Data backup might sound like a no-brainer. But there is more to it. For example, if your place of business is flooded, or leveled by a tornado, you’ll want backups that are not located locally. Your data needs to be backed up off-site. Ideally, this should be to a service that offers redundant physical locations. At a minimum, your data should be backed up to a drive that is kept off-site at your home or some other location that is not within the immediate proximity of your data source. Most businesses will need to do at least a daily backup. Depending on your needs, you can also arrange a live backup that automatically mirrors your data to a backup drive at some distant location.

Critical Role Transfer – Many people like to feel that they are unreplaceable. The simple truth is that we can all be replaced, and at some point, we likely will be. When this happens, we want to make sure that the business is prepared. This is done by documenting each role in the business does in detail. What does each position do, what are the processes they follow, who are their contacts, etc.? If this is done correctly, your worst-case scenario is that you have to fire someone, and when their replacement is in place, you can simply hand them a binder that explains everything they need to pick up where the previous person left off. This position documentation greatly reduces the ramp-up time experienced when replacing an employee.

Insurance – This may be another no-brainer, but sadly, many people neglect it. Having ample insurance on your business is critical. If for some reason, your business is damaged or destroyed, a good insurance policy can help with the cost to replace your lost equipment and facilities.

Operational Redundancy – While this might be out of reach for most small businesses, this is not for many, especially now that a large portion of our workforce telecommutes from all around the country. Operational redundancy simply means that you have operations duplicated in more than one location. This way if one office experiences a power outage, flood, hurricane, tornado, or some other threat, the other office at a secondary location in another part of the country remains unaffected by the issue and can quickly pick up the difference.

In Closing:

While these issues are never pleasant to discuss or plan for, being affected by one of these threats or some other unforeseen threat is almost inevitable in today’s business climate. This leaves the simple question with an obvious answer; would you rather avoid the hard discussion about disaster recovery, or plan your operational continuity, making your business resilient or at least giving you the ability to recover quickly if and when a disaster hits?

Since we never know what threats to expect, or when they might hit us, the smart answer is of course to plan now for the operational continuity of your business.

For additional tips on this subject, FEMA published an excellent article titled “Stay in Business after a Disaster by Planning Ahead”