The High Cost of Not Planning for Disasters

11 Aug ’05

The inclination of many entrepreneurs to put off taking proper data protection and other disaster planning precautions has made it into the NYT Business section, which features a story today with multiple object lessons in just how costly this can be.

Don’t put it off any longer.

That is the advice of specialists in planning for disasters, who say too many small businesses are courting ruin by failing to take fuller precautions against fires, floods and, increasingly, the loss of critical data stored in computers that go on the fritz.

Jane Vitart wishes she had acted sooner. When the Delaware River overflowed behind the French bakery and cafe she owns with her husband, Joel, in New Hope, Pa., last September, a retaining wall protected her shop. That lulled the couple into a false sense of security, and when the flood waters rose again in April, they did not bother to evacuate their equipment or their computer as they had seven months earlier.

Big mistake. “The river rose four feet higher than it did in September and we ended up with 31/2 feet of water in our bakery,” Ms. Vitart said. “The kitchen, the store, my entire office was destroyed. This time the river took that retaining wall.”

The flood caused about $120,000 in damage and clean-up costs, but perhaps the biggest blow was the disabling of her computer under three feet of water. “I ran my whole business on that computer – all my financial data, inventory, vendor bills, my marketing materials, customer lists, menus,” she said. “I was even working on a Web site and had all the photos I had taken on there.” It wasn’t as if she hadn’t taken defensive measures. She had backed up a lot of her financial data, but the backup disk turned out to be defective and she was unable to retrieve the information.

Ms. Vitart’s adversity is being repeated with increasing frequency across the world of small business, specialists say. Entrepreneurs, who are often short-staffed and consumed by the problems of the moment, have always been a bit haphazard about preparing for unexpected events that could threaten their firms’ survival. But the technology revolution that has made them reliant on computers for storing information and running their companies has made vigilance all the more crucial, contends William G. Raisch, executive director of the International Center for Enterprise Preparedness at New York University, which is financed by the Department of Homeland Security.

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