As an SMB, we don’t generally have the time to run a myriad of reports and twist and turn data to figure out where we are making money and where we are not.  Sure, direct expenses are east to calculate, but which lines of business are taking up the rest of the company resources such as sales, marketing, accounting, administrative support etc.? One way to get to the bottom of it without spending a lot of time is using a method called time driven activity based costing (TDABC).  Using this method, you simply figure out the cost of the support department, estimate how long each support activity takes, and then count how many of thise activities you do for each line of business.  For example, you could figure out what the cost of an hour of your sales department’s time costs, track how long you spend generating a half dozen proposals and calculate an average time to generate one.  Then count how many proposals you do for each line of business. A little simple math and you have allocated the appropriate expense to each line of business.

While TDABC can be much more complex than this, once you start tracking information at this level, the possibilities are endless.  You can start tracking the cost of a specific customer or specific job this way if you want to get that granular.  The real trick is figuring out the balance of the time spent tracking and the potential gains.  Don’t try to make the model perfect from the beginning.  Simply get something going and fine tune it over time.  Once you start doing this, you will be able to identify areas for improvment in the organization and start seeing where your excess capacity is which is where you can really start to see this pay off.

Call it what you will; business resumption plan, disaster recovery plan or emergency plan, any business that relies upon technology for any single process should have one in place. These plans can be anything from a simple call list of contacts to very extensive documents outlining each and every move made by each and every player ensuring the most efficient recovery possible. So what is right for your business? Here are some things to consider:

• Is there a system or systems that you rely so heavily upon that without it your business will not function?
  

This type of system is usually noted as a business critical system, and should be well documented with the amount of time it can be down and the exact steps necessary to bring it back up to a functional status. Additionally, each system like this should have a single point person who is responsible for the plan as well as clearly spelled out tasks and responsible persons for the pieces of the recovery. With a system this important, leave nothing to chance.

• For systems that are not business critical, how long can each of these be down before they begin to affect your business?

You should make an exhaustive lists of your systems and prioritize the order in which they should be recovered. This will avoid the loss of valuable time during the crisis trying to make these decisions. Then, a plan should be put into place for each system based upon how a recovery can be executed. Again, list everyone’s responsibilities here so there is no confusion on recovery day.

• Update your plan

Your technology environment, as well as your staff, changes on a regular basis. When staff come and go, be sure to update the plan and ensure that the new people know what their responsibilities are in the event the plan must be put into place. Also, as you get new systems, these must be accounted for in the plan so nothing slips through the cracks in a crisis situation.

• Test your plan!

Going through the exercise of creating a plan is great, but if it does not actually work in the event of a disaster, it will not do you much good. A plan should be tested on a regular basis (at least annually) to make sure that it is still an effective way for your business to recover from a disaster.

Having a BR plan is like having insurance. You hope you never have to use it, but when you do, you sure will be glad you had it.