It doesn’t take a natural disaster or terrorism to bring a business to its knees. The culprit can be as common as a fire, theft, or a computer virus.
That was the case for one of Al McGinty’s clients. McGinty, a security advisor for the crisis-response firm IMAC Consulting Group in Cleveland, was called in when a small-time burglar nearly disabled a machine shop.
The 75-employee company regularly left its rear-loading dock door open for ventilation during the summer. That was until the burglar came through it and stole a laptop that stored the firm’s only copy of a computer program used to make Tomahawk cruise missile components.
The program meant nothing to the thief, who was only after the computer hardware, but it was priceless for the firm. The stolen computer resulted in the loss of a major contract for the company and a $50,000 bill to have the critical program rewritten.
“It crippled them,” says McGinty, a retired FBI agent who notes that simply backing up the data or installing a security system would have prevented the catastrophe. “In general,” he adds, “such systems are relatively cheap to implement, and certainly less expensive than the kind of loss that can put you out of business.”
While disasters may not be preventable, there are measures small business owners can take to ensure the safety of critical data or assets. It could be something as simple as drafting a plan for dealing with potential disasters, says Al Passori, vice president of the Chicago-based research and consulting firm META
Group. Passori says 80% of large global companies lack a comprehensive, systematic continuity plan. The Disaster Recovery Journal reported in 2002 that 43% of firms that suffer a massive data loss will never reopen, and 51% will reopen just to shut down permanently within two years.For small businesses, the results can be even more devastating, says Regina A. Brassil, director of mobile recovery services for the Toronto-based Agility Recovery Solutions. “If a Fortune 500 company loses a data center or access to a warehouse, its typically unscathed, due to sheer size,” says Brassil. “But in a small business, even a short-term outage could translate into real problems.”
PROTECTING YOUR BUSINESS
Brassil says small business owners who want to keep their company’s wheels rolling in the face of catastrophe must take three basic, proactive steps:
Add business-continuation insurance to your policies to provide coverage for disaster-related expenses that may be incurred until operations are fully recovered. Adding such a policy can also reduce other business insurance premiums, says Brassil, since it protects revenues.
Back up all critical company data off-site at a location with 24-hour access. If a company’s data is safe and far from the place where a catastrophe hit, getting operations rolling again will be much easier.
Create a company-wide plan that addresses risk assessment, vulnerabilities, and crisis management. Include information about vendor backup for access to emergency facilities, technology, and communications.
For companies that don’t know where to start, McGinty suggests contracting an outside consultant to review the facilities and operations for potential problem areas and to help devise a comprehensive crisis-management plan. For a small company, this could cost as little as $1,000.
Phil Woudenberg, general manager of the Chicago-based technology-solutions provider Sysix L.L.C., says the biggest mistake a small company can make is ignoring potential dangers. “They know they’re exposed to risk, but they don’t always know how to get their arms around dealing with it,” says Woudenberg.
For more information on disaster preparation, visit the Small Business Administration’s Website at www.sba.gov/dis aster/getready.html. Tips on disaster insurance can be obtained at www.score.org/disasterassist/articles/disinsur .html. “Small business owners really need to think things out now rather than later,” says McGinty. “When an incident does occur, the last thing you want to be saying is, ‘Oh my gosh, we never thought of that.'”