Business disaster recovery Featured

10:47am EDT June 16, 2006
In times of impending chaos or when the unexpected strikes, companies that live by the Boy Scout motto of being prepared have an upper hand. According to Gregg Steinberg, president of International Profit Associates (IPA), you should ask yourself about preparedness in terms of business disaster planning:

What do I do about all my data and files?

If my server(s) or my computers are lost or ruined, am I ruined?

Do I back up all of my data each day?

Do I back up incrementally each day between full backups?

Are my backups secure and off-site?

Do I have proprietary software that is required to recover backed up data? If so, are there copies of that software off-site? Without it, the backed-up data is useless.

“These are just a few of the key questions,” says Steinberg, “and if you answered ‘no’ to any of them, then you need to revisit the issue.”

Smart Business talked with Steinberg about corporate disaster preparedness.

Not all disasters are natural like hurricanes with advanced warning. Fires, for example, happen without warning and can be more destructive. What should a business do if forced to relocate without the ability to recover anything from its original facility?

If relocation is necessary, is there a predesigned plan in place as to where the business will relocate to? As an example, a company that requires many work stations can have a contingency to take excess capacity at facilities that lease work station availability. A manufacturing facility can coordinate with another facility that uses similar machinery as excess capacity and is not competitive. A call center could possibly cut a deal with another call center that has available seats.

The second is to think about mission-critical data and documents required from day to day operations and to have access to those in the event of total or partial loss. What must be kept offsite and where would the business relocate to?

What is the negative impact of not having an evacuation plan in place?
During the unexpected, everyone in the company should know what to do in a subconscious manner in order to dramatically reduced loss, whether in life or key business necessities. The key to a successful evacuation plan is practice. Have the entire company get to the point of reacting with a similar response. Develop a plan, practice it, and if it is ever needed, execution will be easy.

What insurance policies are necessary to assist in the business recovery process?
Each business has critical variables that are necessary to ensure its daily operating success. Many of these can be covered with the appropriate insurance coverage. Coverage should include business interruption, theft, property and casualty, product liability, errors and emissions, directors and officers plus others. It is imperative that a business consult with its insurance professional to review whether or not the right coverage is in place. Many business-ending disasters could have been be averted if only the right coverage had been chosen.

Is it possible to remain cash-positive during a surprise downturn or loss? If so, how?
A business must think — as part of its preparedness planning — what key sales materials and data they must keep offsite in order to maintain operations during a disaster, and what financial and accounting information must be accessible.

As an example, a company that does not have access to its vendor or customer data will be unable to aggressively collect on its receivables in order to maintain ongoing cash flow. Likewise, it will not be able to maintain vigil over what it owes to vendors and may get taken advantage of by an unscrupulous person or business.

It is also important to plan for a ‘rainy day.’ A business should, as part of its preparedness plan, work through the exercise of what cash flow will be necessary to operate at a base level for at least 30 days. This includes a plan without typical cash and sales inflows or product and service delivery outflows.

What are the steps to obtaining a small business recovery loan?
All of the documents necessary to obtain a loan should be maintained offsite so as to ensure the minimal amount of delay due to the inability of producing required information. Inventory lists, equipment lists, IT requirements and key personnel data all may be needed in order to obtain a business disaster recovery loan. If those are not easily accessible at times of loss, replicating the information in some cases may not be possible, therefore reducing dramatically the probability of successfully securing financing.

GREGG STEINBERG is president of International Profit Associates. IPA’s 1,800 employees offer consulting services to businesses throughout the Unites States, including Alaska and Hawaii, as well as Canada. Reach him at (800) 531-7100 or at www.ipa-iba.com.