Data loss downing SMBs? It happens more often than you'd think.

Data loss downing SMBs? It happens more often than you’d think.

When you’re busy trying to build up your small to medium business, it can be hard to spare the time to think about data loss. But statistics show businesses are sunk up to 70% of the time by major data disasters1. This means data loss is something most SMBs literally can’t afford.

Why do so many businesses go bust after a data loss disaster? Well, we’ll answer that for you here.

Cash Flow Issues

A loss of business continuity means money lost; not just on revenue not coming in, but also your employees being unable to do their jobs. But let’s put cold, hard figures to it (and if you’re not into math, just skip to the big, bolded parts).

If you’re running a 50-person company generating $8 million a year, and you’re hit by an outage, the math shows you’ll lose about $5,5002 an hour until it’s resolved. The average U.S. downtime is just under eight hours per outage. That means a single outage is going to cost you a staggering $44,000.

The thing is that outages are a common occurrence, especially for small businesses. The average small business experiences around six outages a year2, which is a ton of lost revenue.

To be clear, we’re not even talking about outages that lead to critical data loss, just a loss of business continuity. That means that on top of your loss of cash flow, you may lose data that puts you out of action for longer.

Productivity Loss

When computers or servers fail, a business can be left paralyzed, particularly their employees. Employees are often sent home or left twiddling their thumbs until the system is restored. For small businesses, an outage means suffering a 43% loss in productivity3. On top of that, each company loses on average 552 man hours per year to an outage.

That means as an employer running an SMB, you’re paying for 552 hours a year in which nobody’s working.

Running a business without a data loss strategy is like taking your business capital and playing it in Vegas.

Running your business without a data loss strategy is like gambling your business capital in Vegas— in short, not a good idea.

Reputation Loss

It’s not rocket science; if you’re not able to provide normal service to your customers, they’ll think you’re unreliable. When it comes to downtime, 35% of businesses report diminished customer loyalty from an outage3. Up to half report a diminished business reputation as a whole. That means your customers might go elsewhere during an outage, and they just might not come back.

Think that number is scary? Well, three out of four customers who experience a data loss stop dealing with that business2.  So don’t expect your customers to be forgiving of a data crisis.

Morale Loss

An outage is good for your employees, right? Who doesn’t enjoy free pay and no work? Well, most employees, actually. Up to 44% of businesses also report reduced staff morale from outages3. That’s not entirely surprising, seeing as their workplace can’t keep the computers running. What’s next, pay checks? An outage will probably take down the payroll server too.

Low morale means low productivity, which hurts your bottom line.

Low morale means low productivity, which hurts your bottom line.

Data Loss

Any outage has the potential to cause data loss if you’re not properly backed up. 58% of IT professionals said their small business would go out of business from sustaining data loss4.

That’s just their thoughts, right? Well, not really. One study shows that 90% of businesses who suffer catastrophic data loss don’t survive5. For a lot of businesses, data is their life blood, and when it’s gone the business crumbles with it.

Data loss is a silent killer. And when I hear more than half of SMBs don’t have either a disaster recovery plan or daily backups, well, I break out in a cold sweat. That’s how you get data loss, people!

Security Loss

An outage is an inherent threat to your workplace security. Whenever your servers go down, over half of employees admit to using unsecured consumer sites to store their data6.

Moving to risky tools to send and access your confidential business information is not a good thing. Not only does this threaten your business, but also can lead to identity theft.

A security breach is a problem for any business, no matter their size.

A security breach is a problem for any business, no matter their size.

Conclusion

The strange thing is, data loss is completely avoidable for most SMBs. It’s not anywhere near as hard to protect your computer data as most think it is.

While many people think daily or weekly backups lead to business disruption, the truth is that a good backup software tool will be able to save your content in real time.

SMBs can avoid data loss disasters by using affordable, set-and-forget backup software like BackupAssist. That way you’re protected against losing data or business continuity, and you’re not gambling with your business’s future.

Protecting your data and protecting your business—they're one in the same.

Protecting your data and protecting your business—they’re one in the same.

  1. DTI/Price Waterhouse Coopers
  2. Everonit-data-loss-inforgraphic, http://www.everonit.com/data-loss-infographic/everon-data-loss-inforgraphic-r4.pdf
  3. CA Technologies, ‘The Avoidable cost of downtime’, Jan 2011.
  4. http://www.tristaritsupport.co.uk/it-support/can-business-survive-without-backups/
  5. University of Texas, National Archives & Records Administration in Washington
  6. Whitepaper: Devastating Downtime, Globalscape. 2014

Posted by Adam Ipsen

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