5 Reasons to Make Regular Data Backups a Part of Your Business Plan An untimely loss of precious data can mean complete and utter doom.
By Lucas Miller
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No matter what your line of work, quality information is the foundation for success. These days, that doesn't just come in the form of knowledge you've gained through your own experiences, but also its ability to use the data it collects and creates.
Your data can (and should) directly inform your business's decision-making. From analyzing the success of your social media campaigns to tracking sales numbers, data is what keeps your business flowing. But what if that information suddenly became unavailable? As part of your business's continuity planning, you must make regular data backups a priority. Here's how.
1. Prepare for technology failures
Technology failures are inevitable. Whether an old computer simply dies or you are the victim of a ransomware attack, it is all too easy for the data in your system to suddenly become completely irretrievable. Even a natural disaster could wipe out your computers and data.
Ransomware has become an increasingly common problem. In fact, Security Boulevard reports that in Q3 2020, nearly 200 million global ransomware attacks were reported, with the United States seeing a 139% year-over-year increase.
While robust digital security measures can counter such threats, hackers are persistent — and creative. If you were to lose all of your data to a security breach or other technology problem, your company would be in deep trouble.
Some data threats are also completely beyond your control. A break-in in which your computers are stolen, or a flood or fire that destroys your equipment, can rarely be predicted. Data backups help you prepare for the unexpected.
Related: Create a Back-Up Plan for Your Data
2. Counteract the human element
Technology issues and external attackers are far from the only threat to your data. Quite often, your employees could compromise the data on your system — sometimes by accident, and sometimes with malicious intent.
In fact, one study revealed that 85% of employees admitted to taking company documents and information when they left their place of employment. And 30% said they took data they had not been involved in creating.
A disgruntled employee could steal data, alter it or delete it from your system. Data backups will allow you to restore what has been lost, as well as help you make your case if the stolen information creates legal challenges.
3. Get back up and running quickly
One vital reason to back up your data regularly is to ensure you are better prepared for when the aforementioned events occur. In a recent email conversation with Mike Hebert, director of technical services at ITS Group, he explained, "Every disaster recovery plan should account for getting your data back in place. When you back up your data on an external cloud server, you can regain access to it within the same day. On the other hand, if you don't have a recent data backup, your business could be inoperable for days — or even weeks. Productivity will nosedive as you try to restore your data. Data backups help you return to normalcy so you can continue serving your customers."
Notably, FEMA reports that approximately 40% never reopen after experiencing a disaster, including the loss of data. Backups of vital documents like contracts, invoices, insurance and more will speed up recovery so you can start making money again.
4. Be ready for potential auditing needs
Despite your best efforts to keep track of all of your finances, you never know when the IRS might decide to audit your business. You can't simply delete your old information after you finish filing taxes, either. The IRS requires that businesses keep receipts for deductible expenses and other tax records for at least three years.
Needless to say, you need to securely store all relevant tax data until the time for a potential audit has passed. The last thing you want is to not have the data you need to prove your income and expenses if the government audits you.
Backups of financial data will also make it easier to perform internal audits. Whether you're concerned about a potential issue with your company or want to look at performance trends, safely backing up data ensures you'll never lose this valuable information.
5. Create a competitive advantage
Regular data backups can ultimately create a significant competitive advantage for your company. For example, if your business was hit by a hurricane, it would hardly be the only business in the area be affected. With data backups, you would be better positioned to resume normal operations before your local competitors, helping you gain new customers while other businesses are still struggling to reopen.
Depending on your niche, communicating that you have a data backup and recovery plan can also help you gain the confidence of potential customers. For example, if you work in finance, your customers will be very glad to have your backups available if their own system crashes.
Related: 5 Questions Entrepreneurs Should Ask Their CPAs to Reduce Audit Risk
Businesses should back up their data on a daily basis, ensuring they're always ready for unexpected setbacks that might affect office technology. By ensuring that you can recover quickly from any digital data-related incident, you protect your company's future and give yourself much-needed security.
