| May 12, 2014
The most important asset any business has is its data. Without it, businesses can't keep track of inventory, can't invoice customers, can't run payroll and can't ensure their business goals are being met.
Data loss is a scary thing for small and medium sized businesses (SMBs). The U.S. Small Business Administration (SBA) says that anywhere from 40 to 60 percent of small businesses fail to reopen after a disaster. A big part of this is due to data loss.
Over the years, I’ve seen many companies deeply impacted by data loss. Usually this impact is a financial one and sometimes it’s so big the company did not survive. The results of a recent Carbonite-sponsored survey of 500 IT pros at small businesses also illustrate the deep damage data loss causes.
More than 40 percent of those surveyed said if their companies permanently lost data it was either very likely or at least somewhat likely they would go out of business. Only half that many – 22 percent – felt it was not at all likely their business would fail.
The survey results also revealed major concerns over decreased profits and lost customers.
When asked, “Approximately how much would it cost your company in lost revenue if it lost all of its data files?” the largest number of respondents – nearly a third (32 percent) – said the cost would exceed $500,000. (Interestingly, reports show the average of lost revenue due to data loss among all U.S. businesses is more than $585K per year.)
Fortunately, companies do seem aware of the risk of data loss. A vast majority of respondents (89 percent) claimed to be prepared at some level, while only two percent felt they were “very unprepared.”
Of course, thinking you’re prepared and knowing it are two different things. Companies have come to us and said that they thought they had a backup system in place. The only time they checked to see if it worked, though, was when they needed to recover data and by then it was too late.
Data loss inflicts serious damage upon businesses and can close them down for good. That’s why it’s in the best interest of every SMB to plan ahead. Businesses must have a sure-fire backup system in place that can get their businesses up and running after any level of disaster – from a crashed hard drive to a natural disaster. The time for them to find out if they are prepared for data loss is before a disaster happens – not after.