How to Create a Disaster Recovery Plan: Step-by-Step Checklist
Key Takeaways
- A disaster recovery plan reduces downtime, prevents data loss, and minimizes disruption when a disaster strikes.
- Common approaches range from basic backup and restore to fully managed DRaaS, each with different cost and recovery-speed tradeoffs.
- Federal guidance, including the FTC Safeguards Rule and IRS data security requirements, makes disaster recovery planning a compliance obligation for accounting firms, not just a best practice.
- A complete plan covers data backups, communication protocols, business continuity measures, and a regular testing schedule.
- Firms without a tested recovery plan face a higher risk of extended downtime, client lawsuits, and permanent closure.
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
- Frequently Asked Questions
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 caused by malicious actors, 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, including flood, tornado, hurricane, fire, and wildfire, as well as 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
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.
Key features:
- Regular data backups (often following the 3-2-1-1-0 rule)
- Offsite storage of backups
- Defined restoration procedures
Cloud disaster recovery
This plan uses cloud technology for data backup and system recovery.
Key features:
- Data and applications stored in the cloud
- Ability to access systems from anywhere with internet connection
- Automatic backups and updates
Virtualization
This approach uses virtual machines to replicate entire systems, including operating systems, applications, and data.
Key features:
- Rapid recovery of entire systems
- Reduced hardware dependencies
- Easier testing of disaster recovery procedures
Hot site
This involves maintaining a fully operational alternate site that can take over operations immediately.
Key features:
- Duplicate hardware and software at the alternate site
- Real-time data replication
- Immediate failover capability
Cold site
This plan involves having an alternate site with basic infrastructure but without hardware.
Key features:
- Lower cost than hot sites
- Requires more time to become operational
- Suitable for less time-sensitive operations
Hybrid
This combines elements of both on-premises and cloud-based recovery solutions.
Key features:
- Flexibility to choose what to keep on-site and what to put in the cloud
- Can be more cost-effective than full cloud or full on-premises solutions
- Allows for a phased approach to cloud adoption
DRaaS (Disaster Recovery as a Service)
This is a cloud-based service that provides all the components needed for disaster recovery.
Key features:
- Managed by a third-party provider
- Scalable and often more cost-effective for small to medium businesses
- Includes regular testing and updates
Why Prioritize Disaster Recovery Planning?
1. Cyberthreats
Cyberattacks remain a persistent risk 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. For the full six-step process of responding to an active incident, see our data breach response plan.
Not Sure Your Firm Could Recover from an Attack? Backup and recovery are only one part of a secure IT environment. Get the Guide
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 “3-2-1-1-0” Backup Rule: Replicate your data by three, store it in at least two different ways, keep one copy offsite, keep one immutable backup, and ensure zero recovery errors when practiced.
- 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.
Disaster Recovery FAQ
What is the difference between a disaster recovery plan and a data backup plan?
A data backup plan focuses specifically on copying and restoring your data. A disaster recovery plan is broader: it covers data backup along with communication protocols, business continuity measures, and the steps your team follows to keep operating during and after any disruptive event.
How often should a business test its disaster recovery plan?
Most businesses should run a full disaster recovery drill at least once a year, with backup restoration testing on a more frequent schedule, such as monthly or quarterly. Testing should also happen after any major change to your systems, staff, or vendors.
What is the 3-2-1-1-0 backup rule?
The 3-2-1-1-0 rule calls for keeping three copies of your data, on two different types of storage media, with one copy stored offsite, one copy kept immutable or air-gapped, and zero errors confirmed through regular recovery testing. It builds on the older 3-2-1 rule to address ransomware that specifically targets backup systems.
How long does it take to create a disaster recovery plan?
Timelines vary based on the size of the business and the complexity of its systems, but most firms can draft an initial plan within a few weeks using a structured checklist. The plan should then be refined over time through regular testing and updates.
Who is responsible for maintaining a firm’s disaster recovery plan?
Ownership typically sits with IT leadership or an operations lead, but the plan should be reviewed and understood by anyone with a defined role during a disaster. Assign a specific owner to review and update the plan on a set schedule, rather than leaving it to whoever remembers.
