No business owner thinks it will happen—a flood, hurricane, fire, or other event that wipes out data, destroys property, or otherwise wreaks havoc on everyday operations.

Because the possibility of such a disaster seems so remote, executives often hesitate to seriously plan for business continuity. But according to the Federal Emergency Management Agency, almost 40 percent of small businesses never reopen their doors after such an event.

You need a disaster recovery plan.
Think technology. Your plan should address issues such as data recovery, applications, networks, servers, and storage. You must also accommodate critical computing needs and operational issues to keep the business running.

Recovery objectives are important and must be weighed against costs. For example, what is your company’s time tolerance for an outage? How much redundancy are you willing to pay for? Your IT team should weigh in on all of these factors.

Think people. If your physical space is compromised, how will you get in touch with employees? Is there a physical record of contact information for everyone in your company stored offsite? Who is in charge of communicating roles, responsibilities, and work assignments?

If your business is dependent on physical space—manufacturing, healthcare, retail, or food service, for example—how will you alert clients that you are temporarily incapacitated? Conversely, if your business can exist with remote access, where will everyone work? Can your IT backup plan accommodate their requirements?

Think insurance. Business continuity insurance helps replace lost income and cover extra expenses related to recovery. Talk with your insurance advisor to ensure that your policy is adequate and updated and that it will cover both short-term and long-term needs.

It’s prudent to have a plan to address these and other disaster recovery issues. Put your plan in place and test it—and cross your fingers that you will never need to implement it.