What happens if I refuse?

Minnesota Guard removes floodwall, opening Minot bridge

Yesterday, we talked about backups.

Did you do anything about it?

If you didn’t, think about this: What would happen to your business if the hard drive containing your customer list, orders, accounting and communications with customers and vendors failed? What would it cost if you lost that data?

I asked startup CEO Doug Odegaard from Missoula for a quick angle on the cost of not keeping good backups. He said “Add up how much people owe you and how much it cost to build your business and that is how much it is worth.

Pratik, a tech business owner from New Jersey who also owns a restaurant, added this: “and don’t forget the good will and revenue loss until operations can resume again“, then reminded me of his experience with a fire:

Mark, if you recall when we had the fire caused by lightning at the pizzeria, I had the entire customer base with purchasing and sales history synced to my home. Insurance company had the first check cut in 10 days of the claim. This practice is so important. We had our standing corporate catering resume in one week from an alternate commercial kitchen which kept revenue coming in as well as routed our VOIP phone service to my mobile for those customers that tried calling. Made recovery a bit easier.

What’s it worth?

That metric Doug offered merits consideration. If you can’t wrap your head around the cost of starting over, doing inventory from scratch, calling all of your customers (assuming you have their contact information somewhere) and asking them to tell you what they orders, how much people owe you and so on, then ask yourself this:

How would you like to go back to the day you started your business and start over?

Ask your insurance agent how many businesses survive a fire or flood if they don’t have these things taken care of.

Put your mask on first

Fire Smoke IndyW 1428

Professional development mentors remind us that we must take care of ourselves first.

They advise that we improve ourselves mentally, physically and emotionally – in other words, attend first to our overall health – so that we’re better prepared to perform well in our roles at work, at home and in our community.

Personal finance mentors do the same when they remind us to pay ourselves first. If we don’t, something will always come up that consumes those funds, leaving us ill-prepared for our future.

Airline flight attendants ask us to put on our oxygen mask first, then help others sitting near us, because we can’t help our kids or significant others if we’re unable to breathe.

Here’s the technology version of putting your mask on first:

  • Backup your business data.
  • Test your backups regularly to be sure you can restore them.
  • Rotate your backup media off-site so that a theft or on-site fire or water damage don’t render your backups useless at the time you’ll need them most.
  • Document your backup and restore process so that you can restore and get systems running again even though your technology wizard is on a 16 hour flight to Australia.
  • Investigate, plan and implement real-time disaster recovery for your business data, particularly if your business model has little downtime tolerance.

This may seem like a hassle. It may seem like unnecessary overhead. Don’t be tempted by those thoughts.

Fact is, if you put your mask on first, you’ll be in a better position to help your customers solve their problems, grow their business and keep paying you. Why? Because your business will be more resilient.

Look back at the business impacts from an event like Hurricanes Sandy or Katrina. If you were impacted by those storms, how would you service customers who weren’t in the storm track? If you can’t, you know they’re likely to find someone else who can.

Your “Someday” is coming

These kinds of things that happen when your business can’t take a power outage, a hard drive crash or similar disruptions. The question is… when?

No one can point to a date and declare (in their Darth Vader voice) that “Your systems are going to fail on this day.”

What I can guarantee, even without considering Katrina, Sandy, Boardwalk fires, blizzards and ice storms, is that it’ll happen…Someday. These things happen to electronic, mechanical devices. You can either be prepared for them or not.

At least once a week, I hear from someone whose “Someday” has arrived. Three times last month I saw it happen to businesses who didn’t have backups. Like a TV show involving the Kardashians, it’s drama you don’t need.

You might think that hardware failures happen more often to businesses that don’t have backups. The reality is that businesses with good backups simply restore them and keep working, so we don’t hear much about their hardware problems. One result of this is that making backups is ignored until it’s too late.

This puts the security of your clients, your employees, your clients’ employees and the families of all these people at risk.

If your most important database disappeared right now, how would that impact your business? How would you recover? How long would it take to get back to where you are right now, productivity-wise? When did you last test your ability to restore your data from a backup?

If you don’t know the answers, ask your technology people. Don’t do it in an accusing fashion, just explain that you’re concerned about the possibility of hardware failure and natural disasters, so you’d like to know what the backup and recovery plan is and how long the recovery period will take for your business. These are things management should know.

Remember, it’s an asset

While there is no good time for this to happen, history suggests that failures are likely during your busy season, or during financial month / quarter / year end.

The good news is that if you have your backup and restore act together, you might lose some time and productivity when your Someday comes, but you’re far less likely to lose your job or your business.

Backup your data. Test your backups to make sure the restores will work. Schedule these tasks.

Care for your data like an irreplaceable asset.

How your top 10 clients can impact your disaster recovery

Yesterday’s mini-rant about the Flip (which I otherwise *really* like) codec thing aside, our disaster series continues today with a discussion about planning for your disaster recovery – before things go bad.

Aymee Ruiz with State Farm Corporate Media Relations sent me this list of disaster recovery planning steps, which I suggest you use as a high-level starting point to formulate your disaster plan BEFORE things go bad. There’s also some discussion of what to do afterwards, so be sure to use that to add to your disaster recovery plan NOW so that you don’t find yourself looking at the ground when your agent asks you if you have <whatever>.

Using that Flip recorder to document your assets isn’t a bad idea either. Just make sure the videos are stored somewhere other than at your business location, preferably in a secure, online location.

Next, I thought it might be wise to discuss something that might make you a little uncomfortable.

Making a top 10 list

You probably already have it in your head, but you may not think about it much.

If the disaster forces you into a position where you can handle the work of only 10 clients…which 10 will it be?

If you think back to last week’s post about the restaurant/catering business that burned, remember what he did first that was super-critical: He kept the catering business alive and kept the cash flowing.

In the eyes of his catering clients, there was no fire.

Despite all that was going on with the public-facing retail side of his business, he kept delivering and kept accepting catering orders. He focused on the relationships and facilities provided to him that kept that piece of the business going while the recovery of his retail business was in motion.

Don’t get me wrong, I’m sure it pains him deeply every day that his retail serving area is closed… but the priority had to be the catering clients. Bigger tickets. Repeat business. Loyal business that appreciates the little things they do that other caterers don’t do.

You need to have that in mind as well. Which clients will get that sort of service, and which will have to wait?

Sure, it’d be ideal that none will have to do without, but the reality is that unless you’ve planned *very* well and you are *very* lucky, some aspect of your business is going to have to sit for a while.

Does that thought provoke you to look at your existing business a little differently?

Do you have another income stream for your existing business that functions without access to your retail (or public-facing restaurant) location?

If you have a retail store, do you sell on eBay? Etsy? Yahoo stores? Your own online store?

If you have a restaurant, do you cater events or corporate meetings and the like?

No matter what you do…is there a core revenue stream you can establish (or that you already have) that doesn’t depend on your physical business location?

It’s easier to get one now than it is in the middle of a crisis. Get to work.

Planning for the train wreck before it happens

Step one after the fire is out or the flood waters have receded (or both) – if you haven’t already done so – is implementing your comeback plan.

Notice that I said implementing the comeback plan, not making it. When times are hectic and the ceiling is dripping with smoky water, your mind isn’t going to be in a place where you can make a solid plan for recovery.

You need to have it roughed out and thought through BEFORE the bad stuff occurs.

Some things, like the references to the tragedy and how you’ll use it specifically in your ads and press releases, will change – but if the plan is in place before your worst nightmare happens you’ll be that much farther ahead and you’ll have a plan made by someone who isn’t fried, tired, ticked off and trying to figure out where next week’s payroll cash will come from.

So what should be in that plan? Here’s a partial list of things to consider…

Important elements of your comeback plan

Get a reward program in place NOW.

This is important to have in place and working well before your disaster so that you know how to contact your BEST customers. The occasional ones might not even notice you were closed for 3 months, but the regulars will and you must be ready to keep them as regulars.

Have a serious conversation about this with yourself, your banker, your insurance agent, your accountant and your attorney.

Now is not the time to find out you would’ve been OK if it wasn’t for that $100,000 deductible and flood exclusion. Pin these folks down. Make them talk about and help you arrange for the ideal recovery (if there is such a thing) in the same location.

Figure out how you’re going to keep your staff.

The *last* thing you need with all this turmoil is to lose your trained people. Make sure that you find a way to involve them in the comeback and do as much as you can to keep paying them, or at least the core players that you’d never want to work for a competitor. Be inventive. Talk to your insurance agent. Do whatever it takes.

Make sure your customer and financial databases are backed up offsite

Backups that sit on a CD or thumb drive that’s sitting on top of your melted computer are pretty worthless. Take a thumb drive home at least weekly, if not daily. Make sure it has your customer and financial databases on it, such as your QuickBooks database.

You can tell QuickBooks to automatically backup your data daily to a certain location. Put your flash drive on your keyring or attached to something else you take home every night. Note: if it’s on your keyring, it might not hurt to use one of those detachable security rings so you don’t lose your keys AND give out your financial data.

One of the biggest reasons that you see businesses fail after a disaster like this is that they don’t have customer records, order records, service records or financial information anymore. If on the day after the disaster you don’t know who owes you money, who has appointments next week and so on – you’ve got a big problem.

Many programs can automatically backup your data, and even send it to a secure backup location.

Communicate with the media and your clients regularly about the progress of your recovery

This is no time to keep secrets. If you will get power tomorrow, let everyone know. Use a blog, press releases and if it merits it, postcards and phone calls (etc) to get the word out.  If you have a problem during the recovery, talk about it. Get people interested in the process so that it becomes “water cooler talk” during the week. Make sure people know that you’re blogging about the experience.

Here’s a great example: http://digmypics.com/recovery/default.aspx

Make it a special event

Dining room closed? Sure, maybe it is, but your parking lot probably isn’t. Throw a block party. Roast hot dogs. Roast a pig. Do whatever it takes to get people to your place of business, even if they have to sit in rented chairs in the parking lot. Just be sure and do it right. Keep them in the habit of coming back, even if the building is a smoldering pile. If they liked you before, give them as many chances to show it as you can.

Go a little crazy

Now is not the time to be boring. The media likes a little eccentricity, so give them what they want…a LITTLE. Funny, silly crazy is fine. Insane asylum crazy is not fine.

If you cook, manufacture, warehouse or store stuff, figure out how that’s going to happen in the weeks immediately after the disaster.

The guy we talked about yesterday managed to arrange for competitors and friends with kitchens so he could continue fulfilling his catering obligations. But what about retail? Don’t make the excuses everyone else would make. Find a way and make it work.

Remember, quitting is the easy thing to do.

What’s your story regarding business fire or flood disasters?

People are coming out of the woodwork on this one, so I thought I should launch a formal request to contact me with your disaster story and the lessons learned.

Feel free to use the contact page, or comment below. If you want to keep the details anonymous, please say so in your comment and I will read/compile your story but leave the comment unapproved so no one sees it.

As for your story…

  • What happened?
  • What was the impact on your business?
  • How did you recover?
  • What was the most difficult part of the recovery process?
  • What blindsided you (other than the disaster itself)?
  • What did you learn about business insurance coverage that you’d never want anyone else to learn the hard way?
  • What did you learn about your agent, their company and the claims process that you wish you knew before the disaster?
  • How long did it take you to get your business back to where it was before the disaster? (Assuming you have)
  • Did your marketing or promotions take advantage of the disaster?
  • How did your clients react to the disaster and to your recovery process?
  • Did you use public relations or the news media to get the word out, or were you able to contact each customer about the disaster and your recovery plans?
  • Did your competition help you recover, do nothing, or take advantage of your loss? How?
  • What was the key – for your personally – to facing it, brushing yourself off and turning things around?

Thank you:)

What can you learn from a business disaster?

Last week, while I was being a slacker (I was canoeing 50 miles or so around Hungry Horse Reservoir with the troop’s older guys), a friend’s restaurant was struck by lightning.

His business wasn’t physically destroyed, but it did take a pretty serious punch from smoke and water damage. Amazingly, the water damage came from a melted pipe that actually put out the fire and prevented the entire facility from burning to the ground.

Since that Sunday, his restaurant has been closed. Imagine having to close your business with zero notice for 10 days to 2 weeks during the summer – despite having a pile of catering work already scheduled.

Not ideal by anyone’s standards.

I spoke with him yesterday to ask what lessons he would take away from this.

The #1 thing that he felt he would do differently, knowing what he knows now, is to raise the value of his business interruption/overhead coverage so that he could make payroll despite being (mostly) closed and restock all perishable foods (think about what it would cost to restock an empty pantry or fridge…).

He felt confident that his facilities insurance and other coverages were in good shape and would probably take care of cleanup and build out of the damaged areas.

Because he does a lot of catering, he’s had to scramble around to friends who own restaurants or have certified kitchens, and has managed to keep that part of the business alive.

We also brainstormed a little about what to do to move forward and prevent the loss of retail, walk-in customers.

A traditional approach would require cleanup (already in progress), build-out, kitchen recertification and so on.  That could take months. In months, all those retail customers are going to already be in the habit of going somewhere else.

So how do you save them?

We’ll talk about that in coming posts, and lessons business owners have learned from other business disasters as well as strategies for keeping those customers and making sure everyone knows you aren’t going down with one punch.

One thing you should expect right off the bat – if you aren’t collecting the names and contact info for your customers – how will you tell them that you’re still open?

Could you contact your customers tomorrow and tell them that the fire wasn’t that bad and you’ll be back in the saddle in no time?

His loyalty/reward program is one way that will help him do just that. Do you have one in place?

MobileMe becomes ImmobileMe

Call me old fashioned, but when someone says they’re gonna host all of my email somewhere else and Im just supposed to trust them and not keep a copy here where I can protect it, I think I’ll pass.

Doesn’t matter to me if it’s Google, Apple’s MobileMe, Amazon S3 or whoever. All of them have had email downtimes or lost data.

As have I. At least if I lose it under those circumstances, it’s my fault and I have control over the backup processes.

Are you trusting your critical business email to (immobile) MobileMe?

Think hard about what happens to your business if you lose access to MobileMe, Gmail or Amazon S3 data for an hour.

Or…

  • A day.
  • A week.
  • A month.
  • Permanently (as occurred last week for some MobileMe users).

Does your stomach hurt yet? It should.

And if you’re using MobileMe or any of these services without a local backup of your critical business data, it’s no one’s fault but your own when you have to shut the doors.

Outlook (or your email program of choice) may be annoying as crud compared to that cool web interface, but I control how many backups I have and where they are, and I can get to them ASAP without having to drive to Cupertino (or wherever) to beg for a restore disk cuz I once golfed with Kevin Bacon and he knows someone who is only 7 levels of separation from Steve Jobs.

Heck, I could probably find Kevin on LinkedIn 🙂

Seriously though, where is your critical path data?

Think about what happens to your data, and thus, your business, if the internet goes down for a few days – or at least, your access to the net.

Think about what happens to your data, and thus, your business, if you can’t access invoices, contact info, and so on.

Think about covering your backside a little better.

And make sure you have a few candles in the closet.