Small Business

Preparing for Power Outages


READ THE TIP SHEET >Last week heat waves hit much of the country, along with thunderstorms, power shortages, and blackouts. And there's more to come. The National Oceanic and Atmospheric Administration (NOAA) predicts 13 to 16 major storms for this year—8 to 10 of which will become hurricanes.

Despite such clear warnings, many small businesses are unprepared for such severe weather and the power outages that often accompany it. A 2004 survey of 400 U.S. small businesses commissioned by Emerson Network Power, a St. Louis-based company that supports network power infrastructure, shows that 62% of small businesses do not have any type of backup power supply.

In the same study, 75% of respondents said power outages are a threat to their business, but only 22% felt prepared to deal with an outage. The Emerson study also found that of the 80% of small businesses that experienced power outages in 2003, one out of seven said their longest outage cost $5,000 or more.

IGNORING THE SIGNS."The blackout of 2003 really got a lot of people's attention, but lately it just seems to be one event after another," says Bob Bauer, group vice-president for Emerson Network Power.

It's clear that power outages are becoming a fact of life that small businesses must address. But because small businesses aren't the ones that make headlines when a blackout occurs, it doesn't occur to many owners to take the time to protect against them, says Jim Reinert, senior director of software and services for data recovery provider Ontrack.

There are some basic steps that any small business, regardless of industry, can take to protect itself against power loss. Though often expensive for very small companies, installing a backup generator means no interruption in power—only a slight flickering of the lights—since the generator is automatically tripped when it senses power loss.

GOOD INVESTMENT.Brett Circe, president of OmniPilot Software, a 44-employee software company in Ft. Lauderdale, Fla. ordered his generator a week before Hurricane Katrina hit last year. Power in his office was out for a day and a half, but OmniPilot's servers, which also host 90 other Web sites, didn't stop once, because they ran on backup generator power. When Wilma hit about two months later and the power was out for nine days, OmniPilot's servers didn't miss a beat.

Since 100% of OmniPilot's sales are conducted online, Circe estimates that the generator saved his company several thousand dollars a day. It cost $16,000 for installation and hardware combined. "I highly recommend it," he says. "There's no reason not to buy a generator—it paid itself off in one hurricane."

Lower-cost, gas-powered generators are also available at just about any home- supply store. "You could walk into Home Depot (HD) and for $750 buy a new 4 kilowatt gas-powered generator and power three to five computers, a desk lamp, and maybe a portable fan for several hours," says John Sternal, spokesperson for Americas Generators, a Miami-based supplier and exporter of generators. To keep everything running longer, however, you would have to shut down and refuel, which would interrupt the power supply for short periods.

LINES OF COMMUNICATION.For less severe power disruptions, there's the uninterrupted power supply (UPS) device, which powers a computer for about five minutes when power is out, giving the user time to save any work and turn off his computer "What Is a UPS?". A UPS starts at $50 at almost any office supply store. That's nothing compared to the $1,000 or so that it costs to do a full-scale data recovery on a computer if it's severely damaged, says Eric Johnston, senior vice-president of Americas Generators.

Too often companies haven't taken the small steps to make sure that their most basic business operations will still function in a power outage. That almost always means making sure the company phone lines remain open. "If the phone isn't answered, the customer will move to someone else. These days, everyone expects immediate response," says Johnston.

BACK IT UP.Even when phones remain online, with power outages comes data loss. The most important way to protect data is to keep backups, says Ontrack's Reinert. There are multiple ways to back up files, whether on a server, another hard drive, CDs, DVDs, or a folder on a company network.

The key, says Reinert, is to "make them regularly, test them periodically, and store them away from the computer you're protecting" (see BusinessWeek.com, 4/4/2005, "Have you Backed Up Your Data Today?").

It takes time and money, but preparing for blackouts can mean the difference between a winning summer and a losing one.


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