8 Ways Your Business Can Avoid Disaster — and Recover If It Happens

Bad things happen to good businesses, no matter how big or small. A hard drive can fail and disintegrate your tax records. Toxic chemicals can be spilled or a coffee pot can catch fire, destroying job quotes. A lab refrigerator can fail, killing vital biological samples. Beyond your desk , there are acts of terror and earthquakes. You can be hacked, the economy can tank or new laws can be enacted that affect whether you can do business at all.

If there's a pandemic that crushes the economy, you shouldn't solely rely on the government to step in as it did in 2020. The government may be able to help, but you should never stake your business on it. Each business has the responsibility to ensure its own survival through difficult and turbulent times. That means any enterprise — or person or family, for that matter — is wise to take steps to resolve problems when they occur.

Having a contingency plan can save your business. One ironic example was that of South Carolina's Cantey Technology, which hosts hundreds of servers for its clients. When lightning struck its building and devastated its network infrastructure, melted its cables and scorched its computers, contingency planning saved the day. This could have been ruinous for Cantey and its customers. But Cantey had moved its client servers to a remote data center, allowing uninterrupted service to its clients. Not every business is so lucky: 40% of small and medium businesses don't reopen after a natural disaster and another 25% fail within a year of a disaster.

Related: 5 Ways to Prepare Your Business for Natural Disasters, Catastrophes and Income Loss

Planning to fail

Knowing that critical failure looms for every business has led to the creation of the related disciplines of business continuity and disaster recovery. According to the Business Continuity Institute , "Business continuity is about having a plan to deal with difficult situations, so your organization can continue to function with as little disruption as possible." Disaster recovery, according to the Andrew Hiles book Business Continuity Management, Global Best Practices , specifically addresses what's needed to recover and restore... information technology, infrastructure and telecommunications capabilities following an incident.

What will you do when something bad happens and threatens your ability to do business? If you plan, you can overcome. To minimize — or, in ideal circumstances, avoid — downtime, you should make a business continuity plan (BCP). Acting quickly can not only keep your revenue coming in, but reassure your customers that you can meet their needs reliably.

One famous military quote says that no plan survives contact with the enemy. But there is little doubt that it is better to plan than not.

Related: 5 Reasons Why You Should Create an Emergency Response Program for Your Business

8 steps to implement disaster recovery

Your business will be unique, but these steps provide the foundation of doing the best job you can of minimizing the damage from any potential incident.

1. Conduct a " risk assessment ." This is a fancy term for identifying anything that can affect your business operations. List the events that could interrupt your business: a natural disaster, equipment failure, power outages, mischief by disgruntled employees, the loss of a key employee or a cyber-attack.
2. Identify your critical business functions. This will depend on what your business is. A landscaping business needs its yard tools and transportation. A web design business needs computers, internet access and power. Whatever these items are, be as detailed as you can be.
3. Create a disaster recovery plan . For each of the potential problems listed above, work out how you'll respond if a disaster happens. Will a tornado affect your ability to deliver products? Some events will be more likely than others, so work out a solution for those first. Plan for a power outage before you plan for an alien invasion, for instance.
4. Back up data regularly. Every business has records it needs to operate, including employee records, tax records, sales records, project specifications, customer lists and even recipes. The cloud provides an easy-to-use option, especially in concert with a document management system (DMS), which you might already be using to record receipts for your business. You should also take the time to learn about digital security.
5. Make an emergency communication plan . In the heat of a disaster, time is critical. It's not the time to start learning your ISP's weekend phone number. Key employees who will need to take action first, then vendors who may need to change shipping or deliver, then customers who may need to know whether they can still visit or buy online, and other stakeholders. You'll need up-to-date contact information for all key personnel, and it should be easily accessible.
6. Train your employees. Once you have a plan, have a periodic training session to educate your employees on what to do. This may be a pizza party for a small business such as a nail salon; it may be a full afternoon or more if it's for an online retailer. Drills and simulations help everyone remember the plan — and identify any weaknesses before a real emergency shreds your plan.
7. Work with key partners. Communication isn't enough if you haven't prepared a vendor or a client for what you'll be doing in the event of a flood or a terror attack. Make agreements ahead of time. Talk to service providers, equipment vendors, shippers, office space providers… anybody who you can rely on when something interrupts your business. Do it before an emergency so you're not battling with everyone else when there's a transit strike or a bridge collapse.
8. Test and update regularly. You made your plan? Congratulations. Don't leave it in a desk drawer or buried under restaurant to-go menus on a bulletin board. Don't forget if you changed a vendor or if you added a new revenue source. Review your plan and make sure it still works.

Related: How to Strengthen Your Business Against the Threat of Natural Disasters

A fire extinguisher when your business is on fire

A stovetop fire in your kitchen can quickly turn to disaster without a fire extinguisher nearby. Your business needs the equivalent. Whether you take your cue from Amazon's multi-region architecture , the government's plan to keep banks and credit unions linked or an astronaut's caution to "prepare for the unexpected," your small business can significantly enhance its survivability when catastrophe calls.