Business Continuity and Disaster Recovery for Small Businesses
As a small business owner, you owe it to yourself, your employees, stakeholders, and any customer you serve to honestly answer this one question: Is your business resilient enough to withstand short or long-term interruptions to its operations?
The answer should be immediate. If you have to pause or think for one second before responding, the answer is no. Each day of business brings with it unforeseen risk. Whether it’s catastrophic weather conditions, cyber- security threats, or the vulnerabilities of the technology we’re dependent on to perform daily work functions, there must be both a business continuity (BC) and disaster recovery (DR) plan in place. There must also be complete confidence in the effectiveness of the BC/DR strategies that are implemented.
The truth of the matter is most small-to-medium sized businesses (SMBs) aren’t doing nearly enough when it comes to continuity and disaster planning. It’s inconceivable that in this era where smaller businesses store more sensitive data than ever before, and the risk of losing this data is so great, that a 2011 Systematic survey revealed that up to 57% of small businesses still have no business continuity or disaster recovery plan in place.
A few years ago, a study conducted by Forrester Research concluded that 66% of businesses with fewer than one hundred employees admitted to having no tested response to not just tech issues like a downed server or network but disasters, emergencies, and power outages.
Let’s break down some of the potential costs of short and long-term business interruptions, why far too many SMBs don’t have a solid business continuity/recovery plan in place, and the necessary steps SMBs can take to get prepared.
A Competent BC/DR Strategy Is a Must
Often misconceived as a problem for the “big guys,” business continuity is a concern for businesses and organizations of all sizes – whether there are 5 or 5,000 employees. The costs of having no solutions in place are too high for many smaller companies to rebound from.
Several hours of unplanned downtime can result in thousands of dollars lost each hour. That’s the kind disruption a small business may face from a shorter-duration tech issue or power outage. Imagine the consequences of longer lasting outages, where a business may be down for days or weeks, as seen in natural disasters like Hurricane Sandy and Hurricane Katrina, or acts of terror like the 2001 World Trade Center attack.
Beyond the immediate tangible costs of outages like lost productivity and revenues, there is also an intangible domino effect that may be harder to quantify. The repercussions can greatly exacerbate the total losses over time, for instance:
- Customers/Clients Jumping to a Competitor: The web hosting company1&1 Internet, Inc. reported that 72% ofweb users admit to abandoning a businessfor a competitor if they can’t instantlyaccess a company website or encounternumerous error messages, problemsplacing an order, or issues accessing onlinefeatures/support. People want immediategratification today and will take theirdollars elsewhere if they don’t get it.Even more alarming is the fact that 58%are likely to never return, which meansthe loss of long-term revenue streams.Perhaps they may be more forgiving inthe event of a crisis like a natural disasterbut there will still be those who go to acompetitor and never come back.
- Word-of-Mouth/Negative Brand Reputation: Thanks to the power of socialmedia, those frustrated by instances ofdowntime will take to Facebook or Twitterto quickly spread their vitriol. Brandbuilding and reputation managementare critical to small businesses. Anynegative attention and publicity broughton by downtime can have long lasting consequences.
- Disgruntled Employees: In small companies or organizations, the burden of troubleshooting recurring tech issues or getting a system back online will typically fall upon the shoulders of an already busy, possibly overworked, employee. This multi-tasking employee will have to sacrifice bigger priorities to constantly play damage control. He or she will sometimes have to do this outside of normal work hours and may be pulled away from projects that generate revenue. If they aren’t happy about this, they may seek employment elsewhere. Both high turnover and the inability to use an employee’s knowledge and skill set for revenue generating tasks are costly to small-to-medium sized businesses.
Too Many SMBs Aren’t Prioritizing BC/DR Plans
Businesses are fueled by information. They are defined by their ability to efficiently and safely handle the data and vital information they generate or process on a daily basis. It is this data that keeps their day-to-day business functioning, ensuring optimal customer service and interaction. While protecting data is a priority for large enterprises, small-to-midsize business owners have the same responsibility but are challenged by limited budgets. For a start-up, the entire focus must be customer-facing, with few resources directed at anything not driving short-term revenues.
This means far too many SMBs today are failing to employ some very basic safeguards to ensure BC/DR.
A September 2011 CDW Business Continuity Straw Poll suggested that 82% of U.S. service disruptions could be reduced or altogether eliminated by even the most basic BC/DR plan. So why aren’t more SMBs taking these precautions?
- Failure to Recognize a Problem: Most SMBs don’t think about business continuity or disaster recovery until it’s too late and they’re scrambling to recover after being taken down. It’s ironic since so much focus goes into keeping a business sustainable by growing sales, or outdoing the competition, yet a vital part of “staying in business” is overlooked when it comes to their supporting technology.
- Intimidating and Complex Planning Tools: SMBs looking to streamline costsand simplify procedures will sometimeswrite off BC/DR practices as unnecessary.Those who do recognize the importanceof preparedness are often overwhelmedby the complex technical jargon thataccompanies business continuity planningand don’t know where to begin when theyhear terms like “business impact analysis”and “risk assessments.”
- They Feel as if They Can’t Afford It and They’re On Their Own: Decision-makers may know they’re living on theedge without a tested strategy, however,they don’t realize that new technologytrends, and the availability of productslike managed service providers (MSPs),can reduce costs and save on resources.MSPs can leverage their knowledge of anSMB’s specific needs with the numerouscloud and hosted backup and recoverytools currently available today.
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