Disasters can strike businesses anywhere, at any time, and in many forms—from natural events to human-caused disruptions. Just how prepared are you and your business to weather an unexpected crisis?
“How quickly your company can get back to business after a disaster often depends on emergency planning done today.” IRS.gov
The time to plan is well before an emergency or unplanned event strikes. In this post, expect information to help you begin your disaster recovery planning—from the very basics to the granular details.
Table of Contents
- What is a Disaster Recovery Plan?
- Why You Should Prioritize Disaster Recovery Planning
- Step-by-Step Disaster Recovery Plan Checklist
What is a Disaster Recovery Plan?
A disaster recovery (DR) plan is a strategy an organization uses to respond to and recover from an event that negatively affects its operations.
The goal of a disaster recovery plan is threefold. Should a disaster—whether natural or prompted by black hats—occur, the plan in place should take effect immediately, ultimately:
- Reducing downtime
- Preventing data loss
- Minimizing disruptions
A DRP is your blueprint for responding to unplanned events. It covers response to weather-related disasters—a flood, tornado, hurricane, fire, wildfire, etc.—and things like cyberattacks, pandemics, power outages, and more.
Without a DRP, you’ll waste precious time trying to figure out the best path forward. When facing an emergency, you typically don’t have time to thoroughly think through each option. The businesses that survive disasters are the ones that prepare well in advance.
Types of Disaster Recovery Plans
| Disaster Recovery Plan Type | Description | Key Features |
| Data Backup & Restore | The most basic form of disaster recovery focuses on regularly backing up data and having a process to restore it when needed. |
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| Cloud | This plan leverages cloud technology for data backup and system recovery. |
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| Virtualization | This approach uses virtual machines to replicate entire systems, including operating systems, applications, and data. |
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| Hot Site | This involves maintaining a fully operational alternate site that can take over operations immediately. |
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| Cold Site | This plan involves having an alternate site with basic infrastructure but without hardware. |
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| Hybrid | This combines elements of both on-premises and cloud-based recovery solutions. |
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| DRaaS (Disaster Recovery as a Service) | This is a cloud-based service that provides all the components needed for disaster recovery. |
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Why Prioritize Disaster Recovery Planning?
1. Cyberthreats
Cyber attacks have been increasing in North America, posing significant risks to businesses of all sizes. A disaster recovery plan helps mitigate the impact of potential cyberthreats, ensuring that vital data and systems can be quickly restored in case of a breach.
2. Natural Disasters
Natural disasters can cause extensive damage and long recovery times. Without a proper disaster recovery plan, businesses struggle to reopen after extended closures, potentially leading to permanent shutdowns.
3. The Cost Of Downtime
A well-designed disaster recovery plan enables businesses to:
- Reduce overall downtime.
- Resume critical operations quickly after a disaster.
- Minimize financial losses associated with business interruptions.
Studies show that 93% of companies that suffer an extended period of data loss are out of business within 12 months, and 50% immediately file for bankruptcy. Why risk it?
4. Customer Trust & Reputation
When disasters strike, customers expect quick responses and minimal service disruptions.
A comprehensive disaster recovery plan helps businesses:
- Retain customers during challenging times.
- Maintain their market reputation.
- Provide timely answers and solutions to customer concerns.
5. Compliance & Legal Obligations
Many data privacy laws and industry standards now require organizations to have disaster recovery strategies in place. In fact, Publication 5708, the FTC Safeguards Rule, Publication 1345, and IRS 4557 guidelines make the requirements regarding data security extremely clear.
Failing to comply with these requirements could result in an FTC investigation, plus:
- Substantial fines: Many jurisdictions have data protection laws that require businesses, including accounting firms, to safeguard client information. Without a disaster recovery plan, firms may fail to meet these requirements, leading to potential fines and penalties.
- Legal repercussions: Accounting firms without proper disaster recovery plans are at higher risk of client lawsuits. If a disaster leads to data loss or service interruptions, clients may sue for damages related to financial losses, missed deadlines, or compromised confidential information.
What’s Included in a Disaster Recovery Plan?
How to Build a Disaster Recovery Plan: Step-by-Step Checklist
While your specific disaster recovery strategy depends on the size of your business, your budget, industry regulations, and how long you can stand to be down—building an effective plan requires covering several essential elements.
Use this step-by-step checklist to create a comprehensive disaster recovery plan that can withstand any threat:
1. Create a Data Map and Backup Strategy
- Document all your systems: Create a data map listing all systems you use, what information is stored on them, and who can access each system.
- Employ the “3-2-1” Backup Rule: Replicate your data by three, store it in at least two different ways, and keep one copy offsite.
- Establish backup frequency: Determine how often different types of data need to be backed up (hourly, daily, weekly).
- Test data restoration: Regularly verify that your backups can be successfully restored.
2. Set Up Communication Protocols
- Define communication channels: Decide what channels you’ll use to communicate during a disaster—text, email, phone, or a combination.
- Create a contact list: Store employee and client contact information securely in the cloud so you don’t lose it in a disaster.
- Establish a communication hierarchy: Determine who communicates with whom, ensuring critical information flows efficiently.
- Create message templates: Prepare templates for different scenarios to facilitate quick, clear communication.
3. Plan for Business Continuity
- Enable remote work capabilities: Provide employees with laptops and necessary equipment to work from anywhere.
- Implement cloud-based systems: Use applications that can be accessed from anywhere with an internet connection.
- Create digital collaboration channels: Set up tools like Slack or Microsoft Teams so employees can quickly communicate and collaborate.
- Document critical business processes: Ensure key operational procedures are documented and accessible to all who need them.
4. Go Paperless
- Digitize paper documents: Convert physical documents to digital format.
- Move to cloud-based apps and storage: Your apps, software, and data storage should all be in the cloud. Look for providers with automatic backup procedures and easy restoration capabilities.
- Integrate your systems: Ensure your cloud solutions work together; consider accessing them from a single environment rather than disparate systems.
5. Test and Update Your Plan Regularly
- Conduct regular drills: Test your disaster recovery plan through simulations at least once a year.
- Update after personnel changes: Revise your plan whenever key staff members join or leave the organization.
- Review after new system implementations: Update your data map and plan after adding new software or hardware.
- Revise based on test results: Address any weaknesses revealed during testing to strengthen your plan.
Start Your Planning Today
The longer you wait to implement a disaster recovery plan, the more vulnerable your business becomes. Don’t let your business become a statistic—start planning today.
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