Ensuring Your Business Will Survive!
Disaster Recovery and Contingency Planning
Rosemarie A. Fisher, CPA
Fall 1998 - NJCPA Newsletter

Would you let your business insurance lapse? Would you leave your doors unlocked at night? Of course not! Now ask yourself, would you operate your company without a contingency plan in place in the case of disaster? If your company was faced with a disaster, are you truly prepared? It has been documented that most businesses that incur a disaster without a contingency plan fail within two years.

Disaster is defined as any sudden or great misfortune. Disaster can come in many forms. Fire, flood, earthquake and/or severe storms are examples of natural disasters, but disaster can also strike in the form of theft, vandalism, sabotage, viruses and equipment failure. In today's business environment, corporate information cannot be easily replaced or recreated.

Therefore, loss of information is a real disaster if a plan for recovery is not in place. A written and tested contingency plan will aid in averting a disaster by pre-planning for loss of operations and/or information. In most cases you look at a worst case scenario (i.e., total loss of building and operations) and then plan for an acceptable minimum restoration in three to four days. The first and most key element to effective disaster/contingency planning is the support of top management. Most contingency plans can be expensive to develop and maintain, with no immediate return on investment. Obtaining management buy-in is critical and must be done up front.

Next page