What would you do if your business suffered a ransomware attack tomorrow? Do you have a contingency plan in case of an IT disaster?
Small businesses are the backbone of many economies. They are critical for job creation, innovation, and community development. But running a small business comes with significant risks, including financial uncertainty, market volatility, and natural disasters.
Today, 60% of small businesses fail within 6 months of falling victim to a cyberattack. Planning for disasters can make or break the recovery process. A solid recovery plan can save a business in crisis.
WEBIT Services has helped hundreds of clients develop and execute effective IT strategies for over 25 years. It is passionate about education and assisting companies to make informed IT-related decisions and investments.
By reading this article, you will learn 10 tips to help businesses prepare for potential disasters and survive.
10 Tips for Disaster Recovery
Tip 1: Create an Incident Response Plan
Creating an incident response plan is one of the most critical steps in preparing for the unexpected. An incident response plan is a set of procedures that help a business respond to unforeseen events. These may include natural disasters, supply chain disruptions, IT disasters, or unexpected financial setbacks.
The plan should outline the business's steps in the event of an emergency. It should include who will be responsible for what tasks and how to communicate with employees, customers, and suppliers in a crisis.
Your IT provider or internal IT team can help you build an IT incident response plan to help if an IT disaster strikes.
Tip 2: Maintain Adequate Insurance Coverage
Small businesses should always maintain adequate insurance coverage to protect them from unexpected events. Insurance policies should include things like:
- Liability coverage
- Property damage coverage
- Business interruption coverage
- Cybersecurity coverage
Business interruption coverage is significant. It can help cover lost income and expenses during a disruption.
One of the newer types of policies is cybersecurity liability insurance. In today's threat landscape, it has become an important consideration. Cybersecurity insurance covers things like costs to remediate a breach and legal expenses.
Tip 3: Diversify Your Revenue Streams
Small businesses that rely on a single product or service are at greater risk. Unexpected events can cause them significant harm. Something like a raw material shortage could incapacitate an organization without alternatives.
Diversifying your revenue streams can help reduce this risk. It ensures that your business has several sources of income.
For example, a restaurant can offer catering services. A clothing store can sell merchandise online as well as its physical location.
Tip 4: Build Strong Relationships with Suppliers
Small businesses should build strong relationships with their suppliers. This ensures that they have a reliable supply chain.
In the event of a disruption, having solid relationships matters. It mitigates the risk of a supplier bankruptcy or supply chain issue. Having supplier options can help reduce the impact on your business.
Tip 5: Keep Cash Reserves
Small businesses should keep cash reserves to help them weather unexpected events. Cash reserves can help cover unexpected expenses like repairs, legal fees, or loss of income.
Generally, businesses should keep at least six months' worth of expenses in cash reserves.
Tip 6: Build Strong Outsourcing Relationships
Business owners may be at higher risk if they try to do everything in-house. As such, businesses should try to build outsourced relationships where possible. In a crisis happens in-house, the company has connections and a safety net to help.
For example, the company could face significant security and IT issues if a key IT team member quits without training a replacement or leaving adequate documentation of their processes.
Tip 7: Check Your Financials Regularly
Small business owners should check their finances regularly. This ensures they are on track to meet their goals and identify potential issues early on.
This includes:
- Tracking income and expenses
- Creating and reviewing financial statements
- Regularly meeting with a financial advisor
Tip 8: Have a Data Backup System in Place
Lost data can only be recovered if it has a working backup. The data is lost if no backup has been made or the backup is corrupted.
Without a working backup file, your only option is manually recreating the information.
To save time, frustration, and critical data, talk to your IT provider or internal IT team about your system backups, where they are stored, how frequently they are updated, and how often they are tested.
If you do not have a backup system, talk to your IT team to find one that will meet your needs.
Tip 9: Train Employees for Emergencies
Small businesses should train their employees for emergencies so everyone knows what to do during an unexpected event.
This includes training for natural disasters, cyberattacks, and other emergencies.
Businesses should also have a plan for communicating with employees during an emergency.
Tip 10: Stay Up-to-Date on Regulatory Requirements
Small businesses should stay up to date on regulatory requirements. This includes tax laws, labor laws, and industry-specific regulations.
For regulated businesses, non-compliance can result in fines, legal fees, and damage to a business's reputation.
Next Steps to Prepare Businesses for the Unexpected
Businesses face risks and struggles every day. However, facing a disaster without a plan could be especially damaging or even devastating.
To help prepare for the unexpected, businesses should consider the following:
- Creating an incident response plan.
- Having adequate insurance coverage.
- Diversifying revenue streams.
- Building strong supplier relationships.
- Maintaining a cash reserve.
- Building relationships with outsourced services.
- Checking finances regularly.
- Having a data backup system.
- Training employees for emergencies.
- Staying current on regulations and compliance.
Business leaders should be involved in creating incident response plans, building relationships, training, and building resources. If your leadership team has not discussed your next steps in a crisis, it may be time to meet, discuss, and seek expert advice on building the best plan possible.
A thorough IT recovery plan is the key to minimizing IT downtime and financial losses in an IT disaster.
Your IT provider or internal IT team can help you build an effective IT recovery plan. Once your plan is created, it should be revisited and, if necessary, adjusted annually.
If your IT provider has not discussed an IT recovery process or an IT incident response plan with you, this may be a red flag. IT recovery and incident response plans are crucial to building a resilient IT system.
WEBIT Services has been performing risk assessments, creating incident response plans, and enacting IT strategies for satisfied clients for over 25 years.
If you're looking for a new IT provider, book a free 30-minute assessment to see how WEBIT services can help.
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