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Are You Prepared? How to Make a Disaster Recovery Plan For Your Business

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Here are a couple of sobering statistics: 25% of businesses fail to reopen after a major disaster, and yet 74% of business owners don't have any disaster recovery plan in place.

If you don’t want your business to be added to those statistics, then read on. In this tutorial, we’ll give you a step by step guide to putting together an effective disaster recovery plan, as well as tips on putting it in place and accessing government grants and other resources if the worst does happen.

As we go through the steps, we’ll use the example of a fictional Florida coffee shop chain called Morning Shot. But remember that this is just an example to show what each step involves and how it might work. The same process can be applied for any type of business in any location.

Step 1: Identify Critical Assets

What do you absolutely need to access on a day-to-day basis in order to stay in business? The first step of writing a disaster recovery plan is to identify those critical assets and list them.

Note that “assets” is a broad term. It could be physical assets like buildings and equipment, or it could be important data, or key employees. But it’s important to make sure they’re truly “critical,” meaning that you simply can’t do without them even for a short time.

For example, in our fictional company Morning Shot, its coffee shops are the lifeblood of the business. When the shops are closed, it stops making any revenue. Keeping those shops open, or at least reopening them as quickly as possible, will be a key priority in any emergency.

The company also has a warehouse on the edge of Tampa where it stores all its coffee beans, food supplies and spare equipment. That building and its delivery truck need to stay operational so that the coffee shops can be stocked. The chain’s head office in downtown Tampa, however, is not a critical asset; it’s important, yes, but the staff could work from home if necessary. If it’s inaccessible for a few days, Morning Shot could still keep going.

Key employees are the CEO of the company, the manager of each coffee shop, and the warehouse manager. All employees are important, of course, but the idea is to come up with a skeleton staff that could keep the lights on for a while in an emergency. If the warehouse manager needs to drive the delivery truck and the store managers need to pitch in and make cappuccinos, they can do that.

Many businesses will also have a lot of critical data and software to list, but for Morning Shot it’s more the physical assets and employees that are important.

Step 2: List Possible Disasters

What kinds of emergency could affect your business? Think broad categories, like earthquake, tornado, cyber-attack, political unrest, etc. Try to come up with at least five, approximately ranked in order of likelihood.

The results will mostly be determined by your location. Morning Shot is located in Florida, so hurricanes are an obvious threat. But every area has its own specific risks, so check the Ready.gov site for information on the types of natural disasters to be aware of in each US state.

A public health emergency like a flu pandemic could also affect Morning Shot, and terrorism is a threat for any US business these days. Morning Shot is not an obvious target, so the risk is lower than it would be if its flagship store were located opposite the White House, but it still belongs on the list, along with things like fires and blackouts.

If you really get thinking, of course, you could probably come up with an almost infinite list of possible disasters for your business, from meteor strikes to alien invasion. But the idea is not to scare yourself—it’s just to come up with a few of the most likely threats. Your plan will be flexible enough to deal with other eventualities too.

Step 3: Plan to Protect Your Critical Assets in Each Scenario

Now that you’ve got a list of possible scenarios, think about the effect each one would have on your critical assets. If the warehouse burned down, for example, how would Morning Shot keep its coffee shops supplied? If a hurricane knocked out power to two of its stores, what effect would that have? What can you do to protect the critical assets.

You can structure it in any way that makes sense to you, but it may help to create a detailed table: 

Disaster

Critical Asset

Effect

Solution

Fire

Warehouse

Stores run out of supplies within two days, meaning angry customers and loss of revenue.

Spread supplies across two warehouses in very different locations, to reduce dependence on a single one.

Blackout

Coffee shop

Store has to close, meaning loss of revenue and clients.

Each store should have a backup generator, so that it can keep going when the power’s out.

Keep going for all the disasters and all your critical assets. In some cases it will be about protecting them; in others, the solution may be to find alternatives.

Step 4: Make a Plan for Workers

By now, you should have three things: a list of your critical assets, a list of possible disasters, and a table showing the effect of each disaster on each critical asset. Now it’s time to start putting it all together into a plan.

The first step is to think about your employees. You should have an idea of what every type of employee should do in any kind of emergency. Where do they go? What do they do? How do you keep them safe? Of course, you want to enable them to keep working if possible—especially the ones you’ve listed as “critical” to your business, but their safety is the first consideration.

For each type of disaster, take a group of employees and lay out the actions you want them to take. For example, if there’s a strong hurricane coming, Morning Shot’s head office staff will evacuate the office and work from home until the storm has passed. The store managers will take responsibility for closing the shop and boarding up the windows, and will check back when it’s safe to see if it’s possible to reopen.

Again, try a simple table to help you get everything clear. You’ll probably want to include more detail in your real plan, but this simplified table illustrates how it could be laid out:

Disaster

Employees

Action

Strong Hurricane

Head office staff

Evacuate office, work from home until manager tells them it’s safe to return to work.

Store managers

Close shop and secure it against damage. Monitor situation and try to reopen when the storm has passed, using backup generator if the power’s still out. Keep in phone contact with staff to tell them when it’s safe to reopen the store.

Step 5: Make a Communication Plan

Once you know where everyone’s going to go, you’ll need a way for them to stay in touch. It’s common in emergencies for communication to be a problem, so come up with several different methods (e.g. mass text messages, voicemails, emails, dialling in to an emergency information line) so that if one doesn't work, another will.

It’s also important to develop a system for keeping everyone's contact information and backup contact information up-to-date. Have a database that’s easy for people to update by themselves, and make it a part of your business operations to remind people on a particular date, say at the start of each year or each quarter, to check their information. And keep in mind that systems may not be available in an emergency, so have people print off the information they need and keep it somewhere safe.

Step 6: Make a Plan for Systems and Data

As we established in Step 1, this is not a critical issue for Morning Shot. But for many businesses, losing data or systems would be as disastrous as having a coffee shop closed down.

Even if your company is not specifically a tech firm, you may have client data, reports, financial information or other digital assets that are truly critical to your business. At the very least, you’ll probably want to keep your financial records and tax information safe.

So back up everything, all the time, in multiple locations. It has to be automated, otherwise you won’t back up often enough, and you’ll risk losing data. Online “cloud” storage services like Box, Dropbox and CrashPlan offer a useful alternative, because the data is stored in a completely different location, so is unlikely to be affected by the disaster you’re experiencing.

Step 7: Find an Alternative Location

What if your main office is put out of action for a long time? Consider what you would do, and how you would keep people working. Large companies often have whole backup buildings waiting in case of emergency. For smaller firms, that’s probably not an option, but you could at least rent a small space for key people to move into in an emergency.

Go back to your list of critical employees, and see if you can rent a place that will allow them all to move there if needed. Companies like Regus offer flexible packages for “part-time” office rental, or you could try a service like ShareDesk, which matches up people looking for office space with those renting it out.

If you do find a space at reasonable cost, you can use it for training, client meetings or special events, so that it’s not wasted. Still, it’s unlikely to be economical to rent a very big space, so make sure the bulk of people can work from home without problems.

Step 8: Appoint Leaders

A plan is no good unless everyone knows exactly what they have to do, where to go, who to call, and so on. All employees should have some training and practice in disaster recovery. We’ll get to that in the next steps, but you’ll also want to appoint leaders who are extensively briefed on what to do, and can help other employees to follow the plan. This is also important because you might be unable to communicate with all your people during an emergency, so you need people who can take responsibility in your absence.

These emergency leaders don’t have to be senior managers in the company. They just need to understand the disaster recovery plan, and be capable of taking decisive action, for example evacuating employees or moving people to your backup location.

There’s nothing worse in an emergency than uncertainty, so establish a clear chain of command, with each person having well defined responsibilities. Make sure everyone else knows who the leaders are too, and is prepared to follow their instructions—especially if the people you’ve appointed are not the day-to-day leaders of the business.

Step 9: Test the Plan

So you now know what your critical assets are and how they could be affected by disasters, and have a plan detailing, in each type of emergency situation:

  • How you can protect each of your critical assets.
  • What actions your employees should take.
  • How your staff will communicate with each other.
  • How you’ll protect your key systems and data.
  • What alternative locations people can work from.
  • Who your emergency leaders are.

It’s time to test the plan. Simulate an emergency as realistically as you can—without putting anyone in danger, of course.

For example, Morning Shot could shut down the power to one of its stores, and see if the backup generator works, how long it lasts, whether the switchover leads to any unexpected issues with the equipment, etc.

If your plan involves evacuating the office and having people work from home, you could have a day when everyone works from home, and see if you can manage without access to the office. What issues does it create? Does everybody know what to do? What if your servers are down too? Do your backup systems work?

Step 10: Practice Regularly, and Refine as Necessary

Practicing for emergencies should be something you do regularly, like a fire drill, so that everyone is prepared, including new employees.

And treat your disaster recovery plan as a living document. If problems occur, or if your business grows or changes, revise the plan as you go.

For example, you may find that employees need access to particular equipment or tools, and don’t have them when they’re needed. You could devise a “grab and go” kit for employees to keep at their desks and take with them in an emergency. Here’s an example of the kinds of things you could include in such an emergency kit.

Putting it into Action

This tutorial has given you a method for creating your own disaster recovery plan. If you have a solid plan in place, you’ll be well prepared when disaster strikes. But getting back up and running after a major disaster can still be difficult.

The good news is that you may qualify for government assistance to help get you back on your feet. Various government bodies provide disaster loans, grants and other forms of aid. If you’re based in the US, try FEMA first of all. The SBA also has special disaster loan programs, and you can also check with your state or local government. And the IRS often gives tax relief to businesses located in disaster zones.

The flip-side of that statistic we shared at the beginning—25% of businesses failing to reopen after a major disaster—is that 75% of businesses do reopen. If you take the time to plan for as many eventualities as possible, and practice regularly so that people know what to do, you’ll be in a good position to ensure that you’re part of the 75%, and that your business is equipped to survive whatever comes your way.

Resources

Graphic Credit: Hard-Hat designed by Jasmine Rae Friedrich from the Noun Project.

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