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What Is a Business Disaster Recovery Plan? - Definition & Example

Instructor: Carol Woods

Carol has taught college Finance, Accounting, Management and Business courses and has a MBA in Finance.

Do you know what will happen if a disaster strikes your business? Will your company respond in the best way to protect employees, customers, facilities and data? Read on to learn what a disaster plan is and how you can create one for your company.

What is a Business Disaster Recovery Plan?

A business disaster recovery plan is a document that specifies exactly what should happen to minimize the impact and return the company to working order as quickly as possible after a disaster occurs that impacts the company.

Does Every Business Need a Disaster Recovery Plan?

Every business has the possibility of a disaster, and a poor response to the disaster might have dramatic impact on the company - from lost data to lost customers to a lost business. So yes, every business should have a plan. The complexity of the plan may vary based on business needs.

What Should Be Included in a Disaster Recovery Plan?

A disaster recovery plan should address these three critical components:

  1. Data
  2. Communications
  3. People

We'll discuss each of these in the following sections.

Data:

Evaluate your business data and decide what is most crucial for your operations. Imagine that all your data suddenly disappeared. What would you miss most? What could be replaced? What could not?

Once you've identified critical data, make sure you have it backed up on a regular basis. The timing will depend on how often it is updated, but many companies back up their data every night. An automatic backup onto a local drive is okay, but ideally, the backup will be at another physical location, so that if something happens to your facility, it won't damage the backup as well. You may want to have it automatically backed up via an Internet cloud solution, so it can be accessed from another location in the event of a disaster.

If you choose to use an outside vendor for the backup process, make sure you understand how their system works, how often it will back up your data and the security it has in place to keep your information secure.

If you are creating a local tape or CD, or using a local external drive, document who will do the backup, how often it will occur and where the backup will be stored (an offsite location is ideal). Periodically check and make sure the backup process is actually happening and that backups are available in the location specified.

Once you've set up your backup process, test a restore or recovery process to make sure you can use the backed-up information. And be sure and regularly review the data you are backing up and your backup solution to make sure you are including all crucial information and are using the best possible solution for your business.

Communications:

If a disaster occurs, you will need a way to get in touch with staff members and others even if your usual work facility is unavailable. Contact lists including alternate contact information for clients, employees and critical other contacts should be stored in an accessible location or all staff should keep a list offsite in their possession. Alternatively, a copy could be stored with an online company offering secure document storage, and all staff members could retain the login information.

There are VoIP systems that can automatically forward company phone and fax lines to alternative numbers, which can allow you to still answer customer calls if you have to evacuate your usual business location.

People:

Identify critical functions that have to happen in the event of an emergency, and assign specific responsibilities to staff members. Some examples might include answering incoming calls or emails, contacting staff to let them know the situation and what they need to do, and contacting the insurance company.

You also should determine an alternate business location, if appropriate - even if it's people's homes, so that they know where they should be if they can't report to the office.

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