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Study Says Small, Mid-Sized Businesses Not Prepared For Disasters

Small and mid-sized businesses still haven’t recognized the tremendous impact a disaster can have on their businesses. Despite warnings, it seems like many still think it can’t happen to them, says a study by Semantec Corp.

The 2011 SMB Disaster Preparedness Survey, which measured the attitudes and practices of small- and mid-sized businesses (SMBs) and their customers toward disaster preparedness. The survey findings show that though SMBs are at risk, they are still not making disaster preparedness a priority until they experience a disaster or data loss. The data also reveals that the cost of not being prepared is high, putting an SMB at risk of going out of business. According to the survey, downtime not only costs SMBs several thousands of dollars, it also causes their customers to leave.

The study found that 41 percent of SMBs do not understand the importance of disaster preparedness. Half of the respondents do not have a plan in place and 40 percent stated that disaster preparedness is not a priority for them. Yet, 65 percent of respondents live in regions susceptible to natural disasters. In the past 12 months, the typical SMB experienced six computer outages, with the leading causes being cyberattacks, power outages or natural disasters.

The survey revealed that the information that drives most SMBs is simply not protected. Less than half of SMBs back up their data weekly or more frequently and only 23 percent back up daily. Respondents also reported that a disaster would cause information loss. About 44 percent of SMBs said they would lose at least 40 percent of their data in the event of a disaster.

According to the survey findings, half of the SMBs that have implemented disaster preparedness plans did so after experiencing an outage and/or data loss. Fifty-two percent put together their plans within the last six months. However, only 28 percent have actually tested their recovery plans, which is a critical component of actually being prepared for a potential disaster.

Lack of Preparedness Impacts the Business

Disasters can have a significant financial impact on SMBs. The median cost of downtime for an SMB is $12,500 per day. Outages cause customers to leave—54 percent of SMB customer respondents reported they have switched SMB vendors due to unreliable computing systems, a 12 percent increase compared with last year’s survey. This downtime can also put them out of business. Also, 44 percent of SMB customers surveyed stated that their SMB vendors have temporarily shut down due to a disaster.

Customers of SMBs also reported considerable effects to their own businesses. When SMBs experience downtime, it costs their customers an average of $10,000 per day. In addition to direct financial costs, 29 percent of the customers surveyed lost “some” or “a lot” of important data as a result of disasters impacting their SMB vendors.


 

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