Disaster recovery: 3 steps now can save a lot of pain later


The more you think about the potential “disasters” that could strike your company — ranging from a broken water pipe to a major fire — the more you realize that a recovery plan is a good idea, especially since it doesn’t have to be complicated or a budget buster.

A new book, “The Wall Street Journal Complete Small Business Guidebook,” lays out the three essentials every company should cover to be prepared for — and to recover from — a disaster:

Review insurance policies. Your company probably already has property insurance to cover the cost of replacing damaged or destroyed equipment or buildings. How about business-interruption insurance, which covers lost income in the event the business is forced to shut down temporarily? Keep in mind that being under-insured is a gamble: The Institute for Business & Home Safety estimates that about 25% of businesses that get hit by a calamity never reopen.

Develop a contingency plan, including one in case disaster strikes a vendor. Come up with a list of backup vendors or suppliers. Consider alternative work sites so that you can keep operating if disaster strikes your company. Keep a list of 24-hour emergency numbers for all your employees, and develop a quick and efficient way of keeping employees informed.

Back up data. Make backup copies of all critical records, such as accounting and employee data, customer lists, production formulas and inventory. Keep that information in a separate location — the farther away, the better — or subscribe to an online data backup service provider.

Take a look at the Small Business Administration disaster-recovery Web page, which offers more links and assistance in putting together a plan.

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