If the insurance industry was, say, the Bermuda Triangle, Donna R. Childs' and Stefan Dietrich's book, Contingency Planning and Disaster Recovery: A Small Business Guide, would be the lighthouse that guides you to safety, and more importantly, keeps your business from sinking.
Childs survived the terrorist attacks of 9/11 in New York City in more ways than one. She was ferried to safety, and unlike many downtown businesses, her small enterprise, Childs Capital LLC, was fully operational eight days after the tragedy.
Because she had a disaster contingency plan in place, her business remained financially sound and continues to thrive.
Childs and her IT guru, Stefan Dietrich, share the knowledge they gained in the book. The tome is organized in four chapters — Preparation, Response, Recovery and Solutions — and addresses business planning for disasters, both natural and man-made.
The real lesson, however, is that crises are usually due to garden-variety human error, not from headline-grabbing stories. The book will help any small business save money by running more efficiently, even if you never experience a crisis that interrupts your business.
The authors adroitly help proprietors navigate the murky waters of insurance coverage and IT policies. Here the authors discuss aspects of the guide that demonstrate why it should be on every small-business owner's shelf and used as an anchor in the calm before the storm.
SmallBusinessComputing.com: Your business survived 9/11, in large part because you had plans in place. But one compelling notion of the book is that your business will benefit regardless of whether there's a melt down. Can you highlight examples?
Donna R. Childs: If you have plans and are organized more efficiently, you'll save money on your insurance premiums. I saved 30 percent. We were hit with a huge post-9/11 insurance bill, but I was able to argue that my back-up plan obviously worked so the premiums should reflect that I'm a lower risk.
Also, when you're creating your contingency plan, you get a better understanding of how your business is working. One company we worked with discovered they were sending mail through FedEx from office to office and saved $9,000 when they realized they didn't need to use priority mail and could accomplish the same thing using shared files.
SBC: Speaking of shared files, a good chunk of the book outlines how businesses can avoid the most common disasters: accidentally deleting a file and not saving the most current version of a file. It doesn't pay to hire someone to retrieve data from a hard drive, because it takes too long and is cost prohibitive. Though the book goes into this in detail, can you tell us — in broad strokes — how you can avoid this problem?
DRC: Small businesses benefit from a combination of user training and a backup plan that employees can access themselves to recover files they mistakenly deleted. Everyone needs to know how save the most current files, how to back them up regularly and how to retrieve them should an accident occur. Leaving retrieval to the IT guys is a common error. Employees are happier when they can fix their own mistakes.
SBC: When it comes to contingency planning, you make the case that in addition to on-site backups, having an off-site data back-up plan is crucial. You outline this in the first chapter. Many small business owners are overwhelmed by the options. What do you recommend?
DRC: Data should be backed up and available somewhere off-site or through an online backup storage system that everyone can access. You don't really need anything fancy, and we don't recommend special software packages because they often use proprietary backup file formats that may be unreadable down the road. To create backups of user data, you can use a variety of file synchronization tools that are available in operating systems, commercially or even as free downloads off the Internet.
Stefan Dietrich: You should always backup to an off-site location if possible. The only advantage of on-site backup is the quicker availability of data in case you need it. For on-site backup, the simplest and most cost efficient way is to equip you computer with a second hard drive that is a duplicate of your primary hard-drive. As for off-site backup, buy space in a well-protected data center that offers such a service — usually at very little cost, e.g., $5 per gigabyte.
|A Must-Have — Contingency Planning and Disaster Recovery: A Small Business Guide, is an essential tool that can help you develop a plan to keep your business alive and well should disaster ever strike.|
You'll notice that we don't recommend tapes, CD or DVDs, etc. In a networked world (which gets better and better every day), these means of backup are too slow, require more organizational structures, have the potential of data theft if not encrypted, and take too long to restore lost data.
Whatever strategy and backup plan you put in place, the second, more critical, problem is a lack of regular testing and maintenance. I've seen small businesses spend a lot of money after 9/11 to put a backup system in place, only to find — during a crisis — that the system didn't work.
I remember visiting a mid-size law firm where the receptionist had been replacing tapes in the company's backup system every evening for over two years, but the tapes were so worn that they were no longer recording the data properly, and nobody checked on the error logs. The system had been sending e-mails saying 'backup complete', but these messages were routed into a mailbox that was only checked occasionally, so nobody realized when the e-mails stopped coming.
SBC: What are your recommendations for finding an IT consultant for small businesses that do not have an in-house expert and need help formulating a contingency plan?
SD: A consultant should understand the data flow (new data generation, archival and retrieval) for your individual business. Search for consultants that have experience addressing such issues at a business level. You should look for an IT security expert who can not only address security issues, but who also has the experience to address secured, encrypted data recovery.
SBC: The price of the book is worthwhile just for the advice on mail management. You supply the addresses of the top companies that deal in direct mail and database swapping so business owners can write in to opt out, cutting down on a huge amount of spam and junk snail mail. I didn't realize there was such a thing as electronic mail. Can you elaborate on that for our readers?
DRC: These are companies that will open your mail, scan it and send it to you electronically. If you google "electronic mail" you'll find them. They're very inexpensive and will save you a lot of time.
SBC: Your book also offers small-business owners disaster advice that goes beyond technology. I've never heard of "business interruption" insurance, and yet it is extremely important. Most standard insurance policies won't cover typical crises like power outages that can bankrupt a business. Can you share an anecdote about this?
DRC: This insurance is for those who don't suffer physical damage but suffer a loss because people can't, for whatever reason, get to the facility or office. There was a dentist downtown that didn't have business interruption insurance and after 9/11 people weren't allowed south of Canal Street. If he'd had business interruption insurance it could have helped a great deal. Or, for instance, if you own a restaurant and there's a blackout and all your food spoils, you're in big trouble without this type of insurance.
SBC: Only five percent of retailers located closest to the World Trade Center received full payment for their WTC-related claims, with 14 percent getting only partial payments. You offer lots of advice and outline steps SMBs can take to maximize benefits. For instance you advise owners to list all their assets, take snapshots of them and document them based on what it would cost to replace it, which not only gives you a better deal should reimbursement time come, but is generally more conducive for insurance claims. Can you give us some examples?
DRC: To avoid disputes is to document the value of your assets, give the insurance company prompt notice that something has happened and agree to what we call "replacement cost valuation method." That means, for instance, don't say you spent $20,000 on ten computers. List their exact specs, hard drive space, RAM etc., so that you will get ten comparable computers and mitigate an argument over what constitutes a fair replacement value.
Donna R. Childs is the founder, president and CEO of Childs Capital, LLC, a global financial institution dedicated to alleviating poverty through economic development. Her profits from the book are endowing a scholarship in her father's name for M.I.T.
Stefan Dietrich was the COO and executive vice-president of E-Vantage Solutions.
When Michelle Megna began covering technology for computer magazines, the CD-ROM and AOL didn't yet exist. Since then, she's been on the byte beat for FamilyPC, Time Inc. and the New York Daily News. She's still waiting to see a pair of 3-D goggles that actually work.
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