The Case for Protecting Your Business Data

"The short of it is this - the documents you generate have value to your business."

It's inevitable. If you haven't experienced it yet, it's waiting for you. If you have, you know just how painful it can be.

The fact is hardware fails. And when it fails, it almost always happens at EXACTLY the wrong time. We take for granted that our technology works all the time. But if you've ever been in the middle of a big presentation and the laptop battery dies, or the LCD projector lamp burns out, you've got a taste of what happens when your technology fails.

What brought this to mind most recently was a Facebook post from a business acquaintance. Over the Fourth of July weekend, he thought he'd jump into the pool to cool off. About 10 minutes later (according to his pretty hilarious post), it dawned on him that his phone was in the pocket of his swimming trunks. Needless to say, one dead iPhone later, he's looking for a replacement. The good news, in his case, is that it's highly likely most of his contact information, settings and apps will be restored to his replacement phone without too much of an issue, given how Apple's service maintains data (assuming you remember to turn it on, or not turn it off).

Now replace "cell phone" with "computer" (although re-creating all of the details is a bit of a stretch, you get the point) and imagine how different the outcome would be.

Chances are pretty good that you spend thousands of hours on some version of a computer over a year. Don't believe it? Consider this:

For an entrepreneur, a 10 hour work day is normal. Assume you spend 50% of the time on a computer (laptop, desktop, tablet, all three in combination, etc.). That's roughly 25 hours/week. Say you work 50 weeks a year. That's 1,250 hours of time using the machine to help drive your business each year, creating the documents, e-mail, spreadsheets etc. that you use to create business value.

Now you can start to evaluate the dollar impact of a data loss.

  • One way is simply to estimate your annual salary "hourly rate equivalent." Let's say you pay yourself a salary of $100K/year. That means your standard 40 hour workweek hourly rate is just over $48/hour. Given those factors, you will have invested $60,000 creating all of those documents. That's about 30-40 times greater than the purchase cost of the machine.
  • Another way is to look at the revenue stream your time generates for your business. As before, assume your business generates $1M annually in revenue. Taking the same approach with the same factors, every hour on the machine is worth about $800 in revenue.

It goes deeper than that. How many of those documents represent ongoing revenue from repeat business, or service contracts, or continuing relationships? That revenue is represented in your future financial projections. How big a slice of your overall revenue that represents depends on the nature of your business.

Here's another scary thought. Would you be able to recover or recreate all of those documents if your machine crashed, or was lost or stolen, or burned up in a fire? 

The short of it is this - the documents you generate have value to your business. Having a regular method for protecting and backing up those documents just makes good business sense.

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