The exact percentage of small businesses that fail specifically because they lacked an IT disaster recovery plan isn't well-documented in verified research. But the pattern is consistent: businesses without a plan for restoring their systems and data struggle far more than those with one.
This guide walks through what a disaster recovery plan actually includes, how to build one in five steps, and what it costs to get this right.
Key Takeaways
- A disaster recovery plan (DRP) restores IT systems and data; a business continuity plan covers broader operations
- Five core steps: risk assessment, business impact analysis, plan development, implementation, and ongoing testing
- Every plan needs documented RTO/RPO targets, a current asset inventory, and a named recovery team
- Costs span basic cloud backup through full-service managed disaster recovery
- Partnering with a managed IT provider often costs less than the downtime a single incident can cause
What Is a Disaster Recovery Plan and Why Small Businesses Need One
A disaster recovery plan is a documented set of procedures for restoring IT systems and data after a disruptive event. NIST defines it as a written plan for recovering information systems at an alternate facility after major hardware or software failure, or destruction of your facility.
Small businesses face this risk differently than large enterprises do. You typically don't have a dedicated IT department standing by, and your budget for redundant systems is thin. When a server goes down or ransomware locks your files, there's often no in-house team to isolate the problem immediately.
That gap matters more than most owners realize:
- No backup IT staff means outages last longer
- Limited cash reserves make extended downtime harder to absorb
- Client and vendor relationships can erode fast during a visible outage
There's no single verified "average cost per hour of downtime" for small businesses. The dollar figures repeated online are usually industry estimates, not measured data. What holds up is simpler: every hour systems are down costs you lost transactions, stalled staff, and recovery labor—whether you've run the numbers or not.
Disaster Recovery Plan vs. Business Continuity Plan: What's the Difference?
These terms get used interchangeably, but they're not the same thing.
A disaster recovery plan (DRP) focuses narrowly on IT: restoring servers, applications, and data after a technology or facility failure. A business continuity plan (BCP) is the larger umbrella — it covers how your entire organization keeps functioning, including staffing, communication, and physical work locations.
The practical difference:
- DRP answers: "How do we get our servers, email, and files back online?"
- BCP answers: "How do we keep serving customers while that's happening?"
A DRP is typically one component nested inside a broader BCP. If your office floods, the BCP might dictate that staff work from a temporary location using laptops. The DRP is what restores the data those laptops need to access.
The 5 Steps of Disaster Recovery Planning
Building a workable DR plan follows five clear steps.
Step 1: Conduct a Risk Assessment
Identify what could actually hurt you — cyberattacks, fires, floods, hardware failure, or plain human error (someone deletes the wrong folder). Rank these threats by likelihood and potential damage to your specific business.
Step 2: Perform a Business Impact Analysis (BIA)
Determine which systems and processes are truly critical. If your email server goes down, does that stop billing? Order processing? Client communication? A BIA quantifies what downtime actually costs each critical function.
Step 3: Develop the Plan
This is where you document:
- Recovery procedures for each critical system
- Assigned roles — who does what during an incident
- RTO/RPO targets (how fast you need systems back, and how much data loss is tolerable)
- Communication protocols for notifying your team
Step 4: Implement the Plan
Put the pieces in place: backup systems, failover mechanisms, and either a cloud environment or alternate site where operations can continue. Assign owners for each control and confirm backups actually restore before you depend on them in an incident.
Step 5: Test and Maintain
An untested plan is only a guess. Schedule periodic test restores, and update the plan whenever your staff, software, or business processes change.
Most small businesses don't have the internal bandwidth to run all five steps alone. A managed IT provider can fill that gap.
LME Services, for example, starts new clients with a free 15-minute assessment of network, backup, and security conditions, then delivers a plain-language risk report before building the recovery plan.
What Should Be Included in a Small Business Disaster Recovery Plan
A complete DR plan isn't just a backup subscription. It needs these five components:
- RTO and RPO: RTO is how long systems can stay down; RPO is how much data loss (in time) you can accept. Transaction-heavy businesses need tighter targets than shops that update weekly.
- Asset inventory: A current list of hardware, software, and applications, ranked by how critical each is to daily operations.
- Named recovery team: Specific people, responsibilities, and contact information—not a vague "IT will handle it."
- Backup strategy: CISA's 3-2-1 rule calls for three copies of your data, on two different media types, with one copy stored offsite.
- Communication plan: Who notifies employees, customers, vendors, and stakeholders, and through which channel, when something goes wrong.
Backup is where many small-business plans fall short in practice. LME Services protects Office 365 (Exchange Online, SharePoint, OneDrive, Teams), Google Workspace, and servers with automated daily backups and offsite ransomware-resistant replication. Microsoft 365 data can be retained in the cloud for up to seven years, and periodic test restores verify that recovery works before you need it.
How Much Does a Disaster Recovery Plan Cost?
Costs vary widely based on your business size, how complex your IT environment is, and whether you self-manage backups or outsource them.
| Option | Typical Range | What's Included |
|---|---|---|
| Basic cloud backup (single device) | Around $15.95/month | 1TB backup, six-month minimum |
| Device-level backup/DR | $50–$150/device/month | Offsite replication, ransomware protection, RTO/RPO documentation |
| Fully managed IT (backup/DR included) | $100–$250/user/month | 24/7 support, monitoring, backups, restore testing |
| Break-fix/hourly IT work | $120–$280/hour | Reactive support without a managed plan |
Disaster Recovery as a Service (DRaaS) has no single industry-standard price. Vendors quote based on protected workloads, data volume, retention length, and how fast you need systems restored.
Prevention still almost always costs less than an unplanned outage once you factor in lost productivity, recovery labor, and client fallout.
Why Partner with a Local IT Provider for Disaster Recovery
DIY backup tools can check a box. They rarely deliver a tested, documented recovery plan built around your actual business risks.
LME Services has supported Chicagoland small and mid-size businesses since 1994. Founded by Leon Engelking after leaving IBM, it is now led by his son Joe as a second-generation, family-run operation. Over three decades, the company has guided clients through the rise of ransomware, the shift to cloud computing, and the scramble to remote work during COVID.
What sets a local, dedicated provider apart:
- Flat-fee pricing under a one-year agreement with a 30-day opt-out, so costs stay predictable
- 24/7 monitoring through a SOC team combined with managed detection and response
- Custom quotes typically within 1–2 days after a discovery call, rather than weeks of back-and-forth
- Dedicated team that already knows your setup, so you never start over with a new technician
In one case, LME brought a ransomware-hit client back online within roughly 24 hours, backed by a disaster recovery and cyber-resiliency plan already in place. That's the difference a tested plan makes versus scrambling after the fact.
Frequently Asked Questions
How much does a disaster recovery plan cost?
Costs vary by business size and IT complexity, ranging from around $15.95/month for basic cloud backup to $100–$250 per user/month for fully managed backup and DR. Outsourced options are often more affordable than building in-house infrastructure.
What are the 5 steps of disaster recovery planning?
The five steps are risk assessment, business impact analysis, plan development (including RTO/RPO targets), implementation of backup and failover systems, and ongoing testing and maintenance.
What should be included in a disaster recovery plan?
Include RTO/RPO targets, a current hardware/software inventory, a named recovery team with contact details, a backup strategy following the 3-2-1 rule, and a communication plan for employees, customers, and vendors.
What is a good disaster recovery plan for companies?
A good plan is tested regularly, tailored to the systems most critical to daily operations, and built around clear, documented recovery objectives rather than assumptions.
What is the difference between a disaster recovery plan (DRP) and a business continuity plan (BCP)?
A DRP focuses specifically on restoring IT systems and data after an incident. A BCP is broader, covering how the whole organization — staffing, communication, facilities — keeps operating during a disruption.
