The phone rings in the middle of the night and a voice says your office is on fire. Early on a long weekend, that old pipe in the back finally bursts and no one will see the water for days. Or suddenly the Weather Channel’s saying a hurricane is barreling in your city’s direction.
Oh, it’s always the other guy, you say? Ask the folks in Louisiana and Mississippi this week, or those out West most of this summer.
Nobody in New York City ever used to even think about flash floods …
According to FEMA, about *half* of small businesses never reopen after a disaster. Worse yet, one in four fails within a year, and nine out of ten shut their doors within two years. Not odds you want to bet against.
So what do you do? If you’ve thought ahead, you pull out your disaster recovery plan for your Phoenix Metro small business.
Disaster Recovery Planning Your Phoenix Metro Business Probably Needs
“Success is the residue of planning.” – Benjamin Franklin
When disaster hits, you have two jobs: 1) Stay open that day and 2) stay open in the days ahead.
So, let’s take a look at the difference between a business continuity plan and a disaster recovery plan for your Maricopa County business, and why and when you need both…
First off, both plans are actual documents (and they work best if you develop and use them together – in fact, a lot of people use the terms interchangeably). Unlike all those other reports you read once and then buried, these plans you pull out once a year to keep up to speed on preemptive approaches – in other words, you’re not waiting for those floodwaters to seep under your door before you know what to do.
Your business continuity plan outlines how your business will keep going during a disruption. It includes procedures and instructions you and your team will follow when bad stuff drips (or gushes) down. Disaster recovery is how you’ll pick up your business again after a disaster… how you’ll get the doors unlocked… how you’ll start seeing customers again in the days ahead.
Seems like common sense, right? But can you believe that a survey last year found more than 50% of companies don’t have a business continuity plan? Or that one in five execs of small and mid-size businesses don’t have a recovery plan?
It’s difficult to imagine why anyone would risk the lost business, make themselves vulnerable to legal risk, a damaged reputation, or even possible fines and the loss of a business license.
Just keep going
To put it in simple terms, your business continuity plan looks like driving to the gas station while your engine warning light is still on — you’re trying to keep things going while the emergency is still happening.
It doesn’t have to be a storm or wildfire on national news, either – you can even get hammered by something as small as a local power outage. The key is to assume that (for a little while) your equipment, workforce, office or workplace, third-party vendors, and just about everything else are unavailable.
Here are a few questions you’ll want to answer on this front:
– What jobs around your business can you NOT survive without, and who does those jobs?
– How are you going to contact your people? Calling on the phone is everybody’s first thought, but don’t forget about texting and social media. You can keep staff updated on your Facebook page if you need to.
– Who should your employees contact first? What shouldn’t they do? (Want ‘em talking to the local news?)
– How will you keep phones and computers/servers working? Are there laptops somewhere else you can run on for a while?
– Will you have to move your business, even temporarily? Where could you go?
Your new normal
Your disaster recovery plan tells you how to get your business back to normal as fast as possible.
For instance, your recovery will probably hinge on technology. Part of your plan could be laying hands on your backup files that are in the cloud or on a portable hard drive that you keep somewhere far from your office. What’s your long-term plan to finance ruined computers?
And of course, in this wonderful world, not all disasters involve water, fire, or wind. Suppose your business gets caught in a public relations mess… a bad lawsuit or a data hack. Part of your recovery plan should cover what statements you’ll make (deny all knowledge, we’re investigating, we can’t comment at this time, etc.)
Both is better
A lot of people combine the business continuity and disaster recovery plans. Suppose your inventory goes up in a warehouse fire. ‘Continuity’ means you call all your employees and vendors. Your recovery involves telling staff what to tell customers and notifying the right people at your insurance company.
The point is, both types of plans work to keep you ahead of a problem. Do not wait to make them.
If we can help let us know. You can even make that part of the disaster recovery plan for your small business.
If that’s something you want in your corner, let’s chat about it:
To your bottom line,
Craig L Elggren, CPA
Craig L Elggren, CPA PC