Is your business adequately prepared and protected in case of an unexpected disaster? The news this week about Hurricane Irene barreling through the Caribbean and along the Eastern US seaboard is a strong reminder that being proactive about protecting not only yourself but also your data is crucial to your business continuity and success. Closer to home, a tornado ravaged the city of Goodrich, north of Toronto. Both events prompted American and Canadian governments to pledge emergency disaster relief funds to affected areas after the fact.

Here are 5 reasons why your business must have a disaster preparedness plan in place prior to a catastrophic event.

1. Losing Data is Costly

Whether a natural disaster, a hard drive crash, theft or human error, losing data has become a fact of life that occurs when we least expect it.  70% of small businesses in the U.S. experienced a data loss in the past year due to technical or human disaster alone [AMI U.S. Small Business 2009 Annual Overview].

According to a Forrester survey, 66 percent of small businesses with less than 100 employees admitted they did not have a business continuity or disaster recovery plan if their main office systems and servers went down. 

2. Losing Data Often Results in Business Failure

Losing significant amounts of data often places a company in a state of extended analysis paralysis not to mention heighted anxiety levels and an inability to focus.
 
According to a three-year-old study from Price Waterhouse Coopers, 70 percent of small firms that experience a major data loss go out of business within a year. Additionally, 93% of companies that lost their data center for 10 days or more due to a disaster filed for bankruptcy within one year of the disaster. 50% of businesses that found themselves without data management for this same time period filed for bankruptcy immediately. (National Archives & Records Administration in Washington).

For small and medium sized businesses that spend a life time building a business and a quality of life, this is no reason for a business owner to throw in the towel.

3. Losing Data Affects Reputation with Customers

Most businesses have a tendency to focus internally on themselves after losing significant data. They often neglect their customers and the domino effect that follows. Additionally, they fail to understand and manage their reputation, image and negative  sentiment with their customers. This often results in lost referrals and sales.
 
Many small and medium sized organizations have no disaster plan in place. The reasons cites are often incorrect according to Cloud Computing, some of which include:

•  “My business isn’t big enough.”

• “It's more important to focus on networking and establishing the business.”

• “All our important data is stored on my laptop, so my data is safely offsite every night.”

• “My server is brand new, so I'm not worried about backing up my data yet.”

• “I don't have the time to perform a daily back-up. Once a month is sufficient.”

• “Daily offsite back-up is too expensive, particularly as this will exceed my data cap and I will have to purchase additional bandwidth.”

4. Disaster Preparedness Increases Employee Productivity

One of the key benefits of having a partner participate in disaster recovery planning is the strategic guidance resulting in short and long term improvements in data management. In the short term, employees benefit from faster and improved data access, centrally stored and backed-up data and automated processes for tasks that save time. In AMI’s 2009 U.S. Small Business Annual Overview Study, 22% of small business responded that “improved data management” was the number one reason for investing in IT in the upcoming year. Being prepared helps employees do their jobs and more importantly do them well.

5. Peace of Mind

When a disaster happens, businesses scramble to solve many problems on a long list. Lost data should not be on that list.  Most people underestimate the real and tangible benefit of peace of mind from not having to worry about data loss.  What is surprising is how often the same people who buy travel and health insurance while on vacation for peace of mind, delay investing in disaster planning with backup systems in place. Isn’t it time you experienced that reassuring feeling saying, “we’re taken care off”, the next time you are asked if your company lost any data following a disaster.

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