Practical Ecommerce

Disaster planning for small businesses necessary?

I have frequently heard that disaster planning and risk assessment are for the large businesses, and that they are a needless administrative task for small companies. Disaster planning and risk assessment are certainly not exciting. I suspect that the vast majority of small businesses ignore both.

This is insane. Most small businesses are far more vulnerable to disasters than large ones. This is because we have fewer resources and typically just one property. Every small business should take at least an hour or two and develop a disaster plan. The loss of a key resource can have a disproportionate effect on a small business.

First you need to list all the key resources, such as people, power, phone line, vehicle, or property. Then list all the likely and unlikely risks that would affect these resources.

For example, what would happen if a utility company accidentally cut your phone line and you were told it would be two weeks before you could be re-connected? Could you really run your ecommerce business from a mobile dongle?

What if the power line was cut and you would be out of power for a day?

What if your ISP went down and you lost all connection? Do you have the ISP’s phone number written down or do you, like me, Google it? And how do you Google anything with no connection?

What about a hurricane, a flood, or a fire?

Could you set up temporarily elsewhere? If so, what information and backups do you need? Where are these backups kept? Far too many businesses would answer that they have no backups, or that the backups are kept next to the computer.

If it is near your fiscal year-end, and you lost the accounting file and the accounting computer, how long would it take to file your tax return? Could you find a complete list of creditors and debtors?

What would happen if a key employee became unavailable? Would you be able to cover?

Once you have listed all the likely and unlikely risks, look at them and determine what you can do to minimize and what you could do if the risk materialized. It may well be that there is a common solution to many risks. Clearly some solutions may be expensive, but with a little lateral thinking cheap workarounds may be found.

For example, I know the WiFi access code of my neighboring shop. With the owners’ permission, if my line went down for whatever reason I could be back online within seconds. If my line is going to be out for more than a few hours, then I have their permission to use a WiFi extender to link my entire business network to theirs.

I have a small, uninterrupted power supply that can provide up to two hours power for a few items. I run my ASDL router and DECT phone from this, so I would still have WiFi, phone, and Internet. I do not run a computer on this UPS. It would drain it too fast. But the ADSL router still powered means I still have full Internet for my laptop and tablet for enough time to find out what is going on and what is being done about it.

My order processing is held on an offsite cloud application. So even if I lost all communication, I could go to any computer anywhere and link to the relevant cloud application and find my orders and customer details.

It really does not take long to work out simple solutions — if you plan ahead, set up some simple arrangements with a neighbor, or find a suitable temporary space that will do in an emergency. That way, if the disaster happens, you will be one step ahead. You will know what to do. You will not be scrabbling around looking for a solution; you will already have it. Properly planned for, a disaster becomes a hiccup as far as your customers are concerned. Without planning, a disaster could mean that you are sitting around helpless, unable to contact your customers, and unable to keep them informed.

It’s not rocket science. But it is common sense. Once you have worked out your disaster plan, write it down. Print it out. Make sure you have a paper copy both at your property and at your home. Ensure this paper copy has all the phone numbers you can think of.

Then test it. Make sure your proposed solutions actually work in the real world.

In my previous career, many years ago, I worked as a consultant for a major banking vendor. This system was the clearinghouse for five major U.K. banks. Every day millions of transactions were processed by this data center. The disaster plan was huge. The company essentially had a duplicate data center some 20 miles away that sat there doing nothing — just waiting to be used if the first one burnt down or become unavailable. Every six months the company conducted a disaster exercise and pretended that the main center was down and the switched all processing to the duplicate center. It all went perfectly.

Unfortunately it was also a complete waste of time. The only reason it worked perfectly is because it was planned in advance. The tapes and backups could be moved between sites only because the vans were booked weeks in advance. The key people were likewise moved using pre-booked taxis. The company’s million-dollar disaster plan would only work with a scheduled disaster.

So when you test your plan, keep it simple. January and February tend to be quiet months. Use the time to plan ahead. Hopefully you will never need to use the disaster plan. But knowing it is there will help you sleep at night.

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  1. Craig Martel January 26, 2015 Reply

    You are right on point… THANK YOU!!!!!

    any body that argues with this is a “Fred Flintstone”

  2. Richard Stubbings January 28, 2015 Reply

    Thank you, I hope you did not have a disaster and thus needed a plan.