As a computer systems network manager and member of the nonprofit High Tech Crime Consortium, Kevin McDonald has seen all manner of data disasters: the medical company whose patient treatment records were lost in a warehouse fire; the police department whose website host vanished overnight; even the careless employee whose leaky liter of Coke ruined a computer server. “If you are a small business and you have a catastrophic loss of data, more likely than not you will never recover,” says McDonald, executive vice president at Alvaka Networks in Irvine, Calif. “Data storage is so cheap now, if you can’t afford it you should shut your business down and do something else.”

Yet many small businesses do not adequately plan to cope with data loss. Online backup provider Carbonite, based in Boston, surveyed 1,005 employees at companies with one to 30 Internet-enabled computers in July 2011. That survey and additional research by the company reveal gaps in backup plans: Although 70 percent reported that they do some data backup, 48 percent said they had lost or deleted data accidentally, and only 13 percent felt vulnerable to a data disaster.

Given how crucial intellectual property, accounts payable and receivable, customer databases, supplier contracts, and the like are to businesses, most computer security experts recommend a comprehensive approach to backup. Since no one solution is foolproof, small companies should use the limited backup and system restore functions on most office computers, tablets, and smartphones; an on-site equipment backup system; and storage that transfers company information to a secure site online.

Here are some recommendations:

On-site backup. Traditional data storage at small companies often involves tape backup systems or external hard drives where company data is copied on a periodic basis. The tapes or hard drives should be stored off-site or put in a fireproof safe at night and on weekends. The pluses include low cost, ease of access, and minimal complexity.

“Small office backup does not need to be a big, elaborate process. In most cases you can buy a 2 TB (terabyte) drive for less than $150,” Bill Carey, vice president at Siber Systems, writes in an e-mail. Manual backup is unreliable, given human nature and because most small companies do not have a dedicated IT staffer, but Siber Systems and many other software companies sell automated backup programs, most for less than $50. “You can include the [hard] drive on the office network and use software like GoodSync to keep everything backed up … at automatic intervals, i.e. every 15 minutes, hour, or end of the day,” Carey writes.

There are drawbacks to on-site data storage: If a fire, flood, or other disaster hits the office, the backup hard drives or tapes will be destroyed along with the computer systems. Physical hard drives and on-site computer servers can fall prey to viruses and other equipment failure. Employers or outsiders can steal equipment from the office or while it is in transit to a safe location.

Online backup. So-called cloud storage has become a popular option in recent years and many providers now offer small business packages for a monthly service fee or a flat fee based on how much data is stored. Small business owners should choose established, reliable providers that store encrypted data on computer servers in secure, multiple locations, and should ask how quickly their files can be accessed in an emergency.

Pete Lamson, senior vice president and general manager at Carbonite’s small business group, says online backup fees range from about $200 to $2,000 annually. “For most businesses to back up all their data in the cloud, they should not have to pay more than $1,000 per year,” he says. Storing information off-site eliminates the risk of office disaster or theft and provides the added feature of allowing company users to access their data from any computer, Lamson says.

Yet many small business owners still have a “fundamental distrust” of cloud storage, worrying about sending their proprietary data out of their direct control and about what happens to their information if their provider goes out of business or offline for an extended period, says Phil Simon, a technology consultant and author of The Age of the Platform: How Amazon, Apple, Facebook, and Google Have Redefined Business.

He uses a “both-and” strategy, with an external hard drive in his Las Vegas office and low-cost online backup through Dolly Drive. He’s also a fan of free, open-source software such as Dropbox, which he uses both for backup and for sharing files, photos, and videos with his clients, he says.

Test any system you use at least twice a year, recommends David Greenbaum, who has been serving small business owners since 1990 through his DoctorDave Computer Repair in Lawrence, Kan. “Go into the service’s interface and randomly select data to attempt to restore. Figure out your key data asset and restore that, as well as a QuickBooks file or maybe a CRM database,” he says. “Is it being backed up properly? Can you do the restore? What about your provider? Check on the health of that company.”

Any system a small business puts into place is better than nothing, says Asher Dahan, president and chief executive officer of Accurate Data Networks, a network solutions provider in Los Angeles. “Nothing is perfect. But I tell clients that whatever they can put into place will save them the major expense of data recovery in case of disaster, and it’s likely to save their business as well,” he says.

Source: Bloomberg