Disaster recovery and protecting your business from the worst that can happen

“I always tried to turn every disaster into an opportunity.” – John D. Rockefeller


Disasters can occur to you (personally), your staff, your suppliers, your customers, your local area … even your Country (depending on your point of view, think Brexit for instance!).

In this context, we are describing events that occur suddenly, without warning and that fundamentally affect the continuity of your business, disasters such as:

  • Substantive loss of physical items (often as a result of burglary, fire or flood)
  • Technology disasters (unexpected updates causing IT failure, unintended or accidental data loss, hacking, ransomware, viruses, etc)
  • Insolvency of the business
  • Sudden diagnosis of long term health issues, chronic conditions, etc affecting the principal / owner / senior staff
  • Death of the principal / owner / senior staff

Most large and global organisations have highly detailed strategies that allow them to cope with these sorts of events and prepare contingencies to allow the business to continue as effectively as possible.

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There’s no reason why small businesses shouldn’t also think this way – and failure to do so can easily result in the business completely failing at just the point you don’t want it too!  So, think through the list of risks, think what you’d do about it and simply prepare a document that can be followed in the event.

Substantive loss of physical items (often as a result of burglary, fire or flood)

Often, we’re talking about equipment that you need to operate your business – from the theft of computers in an office based business to the loss of power tools and vehicles for a tradesman … in all instances, the immediate implication is one of how to replace the lost items as quickly as possible to allow you to return to work, the second issue then being how to pay for the replacements.

Clearly, business insurance has an important part to play here as this resolves the main cost issue but you should still consider what equipment could be lost and how you would attempt to return to normal operations.  There’s even an argument here, where practical, that you might keep a small stock of low cost domestic equivalent items in a physically different location to your business – although these won’t perform as well as commercial ‘trade’ items, they do allow you to continue to work the next day!

Technology disasters (unexpected updates causing IT failure, unintended or accidental data loss, hacking, ransomware, viruses, etc)

Clearly, computers and IT hardware are generally easy to replace but the data and software you lose is often the problem here.  For a long time now, all IT support professionals have extolled the virtues of cloud based backup solutions but how many of us have these in place … and more importantly, how many of us test the solution on a regular basis to be sure it works!

In the world of IT, prevention and planning are the keys to disaster recovery.  Ensuring your IT kit is using up to date security software, training yourself and your team to understand the risks of opening attachments from unknown senders, etc, etc.

If your business relies on a computer to perform any function at all (from quoting and invoicing, email communications to client management software and design and planning tools) you really MUST consider disaster recovery issues with (potentially multiple) backup solutions that work for you.

Insolvency of the business

Anyone who’s ended up being told their business is technically or fundamentally insolvent will tell you of their surprise!  Insolvency is clearly a serious issue that indicates a business in a perilous position, unable to pay their debts on time.  However, in certain circumstances, you can continue to trade so long as you can show that the issues are being resolved.

Clearly, prevention is the key here … strong debt collection procedures, caution on offering credit, careful negotiation with suppliers, rigid invoicing and financial processes all conspire to keep your business operating on a sound footing.

Should you suddenly be given the news, seek the immediate help of your accountant or a recovery expert – believe it or not, insolvency practitioners much prefer to help a business recover than to wind them up (they get paid more in the end!) so why not seek their help?

Also, consider the consequences of your major customer going insolvent … you can take out insurance protection for this circumstance.

Sudden diagnosis of long term health issues, chronic conditions, etc affecting the principal / owner / senior staff

This is a disaster based on the assumption that you are totally incapacitated and unable to work – obviously this depends on your specific business as some can continue from a hospital bed with a laptop and wi-fi connection, but not many!

If you can’t be there, do you know and trust someone who might be able to operate your business on an interim basis, keeping the business ticking over, servicing existing contracts and allowing you time to recover?  If so, have you briefed them on this, have you prepared operation manuals that they can follow, are there basic instructions somewhere?

Thinking pro-actively, what about considering taking our private healthcare insurance to ensure you get back on your feet as quickly as possible – running your own business should come with benefits for you and this is a key one worth considering!

Death of the principal / owner / senior staff

Clearly this is the ultimate disaster!  However, even for a sole trader, some consideration should be made about ‘what happens’ should you pass away.  Clearly, you’ve hopefully built up a business which has some ‘worth’ to pass on to your loved ones – but this ‘worth’ is going to disappear unless you’ve got some contingencies in place.

Firstly, you need to ensure you have a will and that it’s up to date!

Secondly, similar to the comment above about health issues, do you know and trust someone who might be able to continue to operate the business on an interim basis, keeping things ticking over, servicing existing contracts, whilst preparing the business for sale?  If so, have you briefed them on this, have you prepared operation manuals that they can follow, are there basic instructions somewhere … have you even prepared a list of potential buyers (normally close competitors) who your interim manager can talk to?
Preparing a disaster recovery plan doesn’t need to be a massive job but it does need thinking about and documenting somewhere.  In many instances, you can integrate preventative measures into your business to limit the risks, these often involve insurance policies and careful thought – your written plans simply need to provide ‘enough’ information to cover the above instances so why not spend a couple of hours working ‘on’ your business, putting in the thought now rather than having to ‘knee-jerk’ later!

There’s no reason why small businesses can’t create basic disaster recovery plans … not doing so can easily result in the business failing and losing all value!  If needs be, seek professional help from a coach / mentor / IT expert, etc.

Blunt thinking on disaster recovery planning from Yorkshire Powerhouse

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