Disasters and SMBs: Plan to Survive, Don’t Fail to Plan

Small businesses, beware. Can your business survive a natural disaster? Chances are against your survival if you do not have a recovery and continuity plan in place.

A national survey conducted by custom market information companyTNSInfo reveals that many small businesses would not survive a natural disaster because they lack adequate, if any, disaster preparedness. Small business owners run a one-in-four chance of experiencing a significant crisis in a given year, according to the Association of Small Business Development Centers.

The majority of small businesses do not have a disaster plan in place, the TNSInfo report warns. Perhaps even more troubling is that countless small-business owners and decision-makers are not worried about the impact a disaster can have on their livelihood.

Of those businesses that experience a disaster and have no emergency plan, 43 percent never reopen. Of those that do reopen, only 29 percent are still operating two years later, according to the survey.

“Simple and affordable things can be done. Figure out what are the most important things to protect. Those who plan to survive their business fare very well,” Jon Toigo, CEO and managing partner of business consulting firm Toigo Partners International, told the E-Commerce Times.

Resources Available

Office Depot partnered with Toigo to compile a free brochure titled “Expecting the Unexpected: Disaster Preparedness Strategies for Small Business.” The guide highlights simple and affordable solutions on how businesses can protect their most important assets — their people and their data.

The guide cites disaster preparedness deficiencies revealed in a study of 2,500 small to medium-sized companies conducted by TPI. The results can be sobering for small business owners.

For example, 71 percent of small businesses do not have a disaster plan in place, and nearly two-thirds (64 percent) of those responding said they do not need one. If a disaster were to strike, 63 percent said they would be able to resume business within 72 hours.

Historical reality often proves that expectation false, according to Toigo.

What is preventing small-business owners from planning for disaster? Many simply feel overwhelmed, he said. “They don’t believe anything will save their data. Also, they think [preparedness] is too costly. Neither is true.”

Taking Steps

Simple, straightforward actions can save a company. It is not about the threat; rather, it’s about what you need to protect your company, noted Toigo. For instance, For about US$1, small-business owners can store critical data on one or two DVDs. Or they can put essential data on a flash drive or another type of externally attachable drive and store up to 320,000 documents.

Enough free support is available that small business owners do not have to pay for disaster preparedness. Cost should not be an issue.

“Small to mid-size businesses face additional challenges because of limited budgets when developing disaster recovery and business continuity plans when compared to their larger counterparts,” Mark R. McNulty, President and CEO of New Jersey-based business development firm Chief Connection Officer, told the E-Commerce Times. “Simple and cost-effective methods are available.”

One step is to attend free programs like the one he chairs for the American Red Cross. This event features high-level executives from the national headquarters.

Another step is for small business owners to invite vendors and consultants to make on-site presentations to provide detailed information regarding disaster recovery plan preparation. Often, vendors will provide everything required to develop needed documentation just short of doing it, explained McNulty. An alternative is to use existing staff to create simple yet effective plans for their companies.

A third step is to tap into the tremendous amount of free information the data center industry offers at trade shows. The main thrust of that industry is disaster recovery and business continuity, said McNulty.

Planning Counts

Everyone’s business and workflow is different, so business owners need to identify that workflow and all the possible points of failure in a disaster, suggested Jeff Greenhouse, president of Philadelphia-based interactive marketing agency Singularity Design. They also need to take steps to preserve their electronic records.

Take care of irreplaceable assets first, suggested Toigo. That list should include all personnel and key contacts.

“I’ve done over 100 plans for business. Small business stands a better chance of surviving disasters with planning,” he said.

Industry studies report that more than 90 percent of business records are now produced electronically. However, almost half of these records are never reproduced in paper form. When a disaster occurs, small businesses may be faced with lost data, downgraded revenue forecasts, loss of customer confidence and sometimes potential liability.

To preserve electronic records, Greenhouse suggests these key strategies:

• E-mail critical files to a Web-based e-mail account or a home computer.
• Copy locally stored files to a network file server.
• Use a Web-based backup service.
• Burn backup DVDs or CDs.
• Set up an enterprise-level backup system with off-site storage.

“Each method is better suited for different intervals, so the best solution may be a combination of them,” Greenhouse said. “I’d say that on this topic, paranoia and a healthy belief in Murphy’s Law is the best defense”