If your company permanently lost all data, it would have a 60 per cent chance of going under. Did you know on average, it takes 21 days and £12,000 to recreate just 20MB of lost accounting information? It is crucial to your business’s survival to back up data and form a disaster recovery plan, now more than ever.

What is remote data back up?

It’s essentially an insurance policy for your company’s day-to-day and organisational information. As you work, your data is sent over a secure line to a protected databank, and can be retrieved in part or in whole, at a later date.

You have a 1 in 25 chance of having your laptop stolen, broken or destroyed, every year.

No matter how careful you are, it can and does still happen. When an MI5 agent’s laptop was stolen in 2009, the counterintelligence agency assured the public that the data was encrypted. Aside from password protecting and backing up data, it’s a good lesson to use a virtual private network (VPN). The laptop would act as a terminal, not holding vital data as it would securely log-in to the company’s network after authentication.

50 per cent of critical corporate data is stored unprotected on desktops and laptops.

Without password protection or even encryption of the data, the possibilities of damage aren’t just caused by undercover spies and petty thieves, but users on a network with access to files in the common drives.

The cost and time to recover a typical SME’s data.

One Megabyte (MB) is about 500 pages of text. With this in mind, think of the costs:
19 days and £10,700 to recreate just 20 MB of lost sales data
21 days and £12,000 to recreate just 20 MB of lost accounting data
42 days and £61,000 to recreate just 20 MB of lost engineering data

10 years later and 500 times larger…

Did you know your computer stores 500 times more data compared to 10 years ago? This increased capacity amplifies the impact of data loss. If your company uses computers and servers older than five years old, with today’s demands on the hard drive and CPU, the chances of disk failure are higher.

Only 34 per cent of companies actually test their tape backup.

Of the 34 per cent of companies that test their tape backup, 45 per cent find failures in recovering data. Think of the 66 per cent of companies that have never tested the system they trust to recover their company from disaster. When was the last time you checked tape drive?

60 per cent of SMEs collapse after losing their data.

According to a recent report by the National Computer Security Association, within six months, 60 per cent of SMEs dissolve after permanently losing their data. It’s a sad and avoidable statistic that can be combatted with a disaster recovery / business continuity plan.

Only one third of companies have a disaster recovery plan.

Does your company have one? It should form part of your systems and training process within the company. You can start today by jotting down the following considerations: how can the company continue to operate without data (do you have backup, printouts, etc?); what information is essential and what can be replaced?; how much money does the company lose every day it’s down?; How can you decrease the likelihood of a disaster (how often is the equipment checked and tested)? What steps should you take to resume business as normal after a flood, server failure, etc? Remember, essential data is more than just documents and spreadsheets. Think of the configuration settings, user names, passwords, serial codes and licenses, to name a few.

Tape backup went out with Windows 98.

It’s widely agreed by businesses to be unreliable, prone to failure and not secure. Added to this, how often is the tape changed, duplicated for contingency, taken off site, stored in a secure place, password protected and tested? An automated off-site online backup system also removes the chances of human errors.

66 per cent of small businesses are worried about their disaster recovery plan.

The 66 per cent of small businesses that have a disaster recovery plan and data backup are worried that it has significant vulnerabilities. The concerns include equipment reliability, security of data, and staff. It’s not wise to make one person responsible for the entire recovery of your IT infrastructure. If they were to leave or go on holiday, it would cost your company a lot in wasted time and money.

22 per cent of computer users would like to back up their data.

22 per cent of computer users would like to backup their data and won’t get around to it. With over 17years experience in writing disaster recovery plans for our clients, we know the best time to back up your data will always be now.

Research supplied by On Line Computing

Bad things happen. It’s a fact of life. But with a little preparation, businesses can mitigate some of the impact.

There are some estimates that 80 per cent of businesses with no business continuity plan fold in the aftermath of a major disaster. And while this could be something along the lines of a national emergency such as a terrorist attack or health epidemic, it could just as easily be something closer to home, for example the incapacity of a key member of the business. Or it could be something as simple – yet damaging – as a strike leaving you out of contact with your customers.

Putting a plan in place can not only help you arrange procedures for dealing with emergencies; it also provides a step-by-step guide for individuals to follow when they may be finding it difficult to make decisions – giving them a route to follow will help them work through the crisis.

“By developing a simple plan, a business continuity plan, you can protect your business to ensure that no matter what disaster strikes you are prepared and “Business as usual” is the only thing your customers and suppliers see,” says Colin Ive from SME Continuity.

Your first step, according to the Contingency Planning and Disaster Recovery Guide, is to prepare a list of all the potentially serious events that could happen. This doesn’t necessarily mean listing all the disasters that could befall you, but looking at the issues that would affect your business. So instead of listing swine flu, ebola or any other illness, the list would include something along the lines of staff shortages or key person unavailability.

For each potential issue, you need to come up with a process to follow – the key people involved, any suppliers that need to be contacted, a list of contractors who may be able to support you and, vitally, any insurance policies you can claim on.

While business insurance won’t be able to completely prevent any effects of a disaster, it can help to mitigate any costs you may incur. Key Man Insurance can provide a cash injection into a business in the event of the untimely death or incapacity of a specified member of staff. The funds can be used to offset any loss of revenue caused by that person’s absence, or to recruit or train a new person in that position.
If your business is hit hard, and has to stop trading for a short period, Business Interruption insurance can help to tide you over. It’s a short term solution for a few weeks and is there specifically for if you have to stop trading due to factors outside your control – it doesn’t cover a downturn in trading conditions.

If the emergency is a bit closer to home, public liability insurance and employers’ liability insurance will protect you from claims for issues that arise on your premises. We live in a culture of litigation and if an injury or damage could be found to be your responsibility, then expect a hefty bill.

UK businesses are being hit hard by the recession, and should be doing as much as possible to protect themselves; however research from Scottish Widows reveals that businesses are not doing enough to protect themselves from the unexpected.

The research, which surveyed over 500 UK businesses, found four in five (81 per cent) were dependent on a key employee whose loss would seriously impact the profitability and/or survival of the business. Despite this 67 per cent of businesses fail to have this key employee insured, leaving them exposed to a significant loss in profit as a result of their departure through illness or death.

This lack of protection is surprising as the research shows three in five UK businesses without key person insurance (59 per cent) fear they would not survive the loss in profit if a “key person” such as an employee, partner or director were lost, while 11 per cent have not even considered how it would affect them. When it comes to employers’ priorities, they rank insuring office equipment such as photocopiers and printers higher in critical requirement to the company (29 per cent) than ensuring critical illness cover for key persons (13 per cent.)

For those businesses that have not taken out any insurance (such as life cover or critical illness cover) to cover the cost of losing a key person, director or partner, a third (32 per cent) don’t see the value of it, 29 per cent have not thought about it, 19 per cent think it would be too expensive, and 5 per cent didn’t even know if they needed it.

Richard Jones, protection market director at Scottish Widows explained: “Staff can be the greatest assets in a business but these findings paint a worrying picture. It is concerning that such a high percentage of UK entrepreneurs do not have financial contingency plans for their business in the event of losing key staff. The current climate emphasises how crucial it is for businesses to review their finances and in doing so improve their control over the future and security of their organisation.”

Dr Marius Barnard, retired cardiac surgeon and creator of critical illness insurance has supported Scottish Widows’ thought leadership and research campaigns over the years. On these latest findings he stated: “Whilst modern medical science means that a business leader may survive a heart attack, the business may die from it. The definition of business protection insurance is to give the business liquidity when it is needed most.”

The impact of retirement, death, critical illness, incapacity or an accident can be made even greater if no exit strategy is in place. Scottish Widows’ study also revealed that 65 per cent of businesses do not have an exit strategy for example when they plan to leave the business. In addition over half (56 per cent) of UK businesses have not even considered the impact of having to unexpectedly leave the business should the unforeseen happen such as critical illness, incapacity, accident or death.

This is particularly pertinent for small to medium sized businesses who account for around two thirds of private sector employment and over half (51.5 per cent) of private sector turnover.

Richard Jones continued: “Having a business contingency strategy should be an early priority when people think about starting a business and should be reviewed as the business evolves. This will help employers get the maximum investment back from their company, successfully market their business to potential buyers and ensure their exit from the business, be it planned or unplanned, causes as little disruption as possible.”