Disaster Recovery Planning and Business Continuity For Startups

As we watch the news and pandemonium the media is creating about the swine flu today, it should remind entrepreneurs that disaster planning is no joke. Of all the entrepreneurs I have asked about disaster preparedness in the last couple of years, 9 out of 10 said they were not worried and did not have a disaster recovery plan or business continuity plan… heck, they think nothing will ever happen to them! But disasters happen all the time, whether it be a tornado hitting Chicago, an earthquake in San Francisco, or the power going out on the East Coast – real and unexpected disasters happen all the time. And, what do you do if your entire staff gets ill at once?

It doesn’t matter if your startup is compromised of 1 or 200 employees – contingency planning is a must! Business continuity issues will bite you when you least expect them. Be prepared!

The question is not if you need a Disaster Recovery Plan (DRP). The question is what you need to cover in it. Here is the technique I use to decide what needs to be covered by a DRP:

1. Will the loss of an item/data/resource stop your business from functioning?
2. Will the disruption caused by the loss of this item/data/resource cause larger financial damage to the company than the monetary value of it?
3. Will the government hold you accountable for any events related to this item/data/resource?

These three questions should be supplemented with the ones important to your business.  There are plenty of DRP examples out there. A little search on Scribd.com will garner tons of draft versions fit for your type of business. Get started on it NOW!

Also, in my personal experience:

1. There is no such thing as too much detail in a DRP.
2. DRP should be treated as a continuously updated draft.
3. CEO, head of ops (COO), board members, and several other key members of the team should have the latest copies of the DRP.

Lastly, you also need to think about succession planning. This is a deep subject that would take too much time to explain in a blog, but I suggest you invest in getting your accountant, tax person, and attorney(s) in one room.  Hammer out a high-level plan in case something happens to one of your key people. The minimum you should do is at get key-person insurance on the founders and executives on your team.