Disaster Recovery Planning for Mid-Sized Businesses: Why "We Have Backups" Isn't Enough

At 3:47 AM on a Tuesday, a 280-person insurance agency's server room flooded due to a failed HVAC unit. By 6:30 AM, when the first employees arrived, their entire on-premise infrastructure was underwater.

"No problem," the CEO thought. "We have backups."

Except those backups were stored on a NAS device... in the same server room... now underwater.

The company was offline for 11 days. The cost: $340,000 in lost productivity, $180,000 in emergency IT recovery, and three major clients who moved to competitors. Total damage: over $800,000.

This is a true story. And the tragic part? It was completely preventable.

If you're running a business with 50-900 employees, you probably think "we have backups" means you're protected. But disaster recovery is far more than just backing up files.

Here's what you actually need to know.

What is Disaster Recovery (And Why It's Different from Backup)

Backup: Copying your data so you can restore it if something goes wrong.

Disaster Recovery (DR): A comprehensive plan for getting your entire business back online after a catastrophic event.

Business Continuity (BC): Keeping your business running during a disaster, not just recovering afterward.

The critical difference:

• Backup answers: "Can we restore our files?"

• DR answers: "How long until we're operational again?"

• BC answers: "How do we keep operating during the disaster?"

The 5 Disaster Scenarios You Must Plan For

1. Ransomware Attack

Probability: High (60% of businesses hit in 2025) Impact: Catastrophic without proper planning Recovery time without DR plan: 2-4 weeks Recovery time with DR plan: 4-24 hours

2. Hardware Failure

Probability: Moderate (servers typically last 3-5 years) Impact: Moderate to severe Recovery time without plan: 3-7 days Recovery time with plan: Hours to 1 day

3. Natural Disaster

Probability: Varies by location (flood, fire, hurricane, earthquake) Impact: Complete facility loss Recovery time without plan: Weeks to months Recovery time with plan: 1-3 days

4. Human Error

Probability: High (someone will accidentally delete something critical) Impact: Moderate Recovery time without plan: Hours to days Recovery time with plan: Minutes to hours

5. Cybersecurity Breach

Probability: High and increasing Impact: Severe (data loss, legal liability, reputation) Recovery time without plan: Weeks Recovery time with plan: Days

The DR Metrics That Matter

RTO (Recovery Time Objective)

What it means: How long can your business survive without this system?

Examples:

• Email: 4 hours (people get anxious quickly)

• Accounting system: 1 business day (can work around it briefly)

• Manufacturing control system: 1 hour (production stops)

• Customer database: 4 hours (can't serve customers)

Your job: Define RTO for every critical system.

RPO (Recovery Point Objective)

What it means: How much data can you afford to lose?

Examples:

• Financial transactions: 0 minutes (every transaction must be captured)

• Customer database: 1 hour (can recreate recent changes)

• Marketing materials: 24 hours (acceptable to lose a day's work)

Your job: Define RPO for every critical dataset.

Reality check: Tighter RTO and RPO = more expensive solutions. A business that needs 15-minute RTO and zero RPO requires enterprise-grade infrastructure. A business that can tolerate 24-hour RTO and 4-hour RPO has many affordable options.

The 3-2-1-1 Backup Rule (Updated for 2026)

Old rule: 3-2-1 (3 copies, 2 media types, 1 offsite)

New rule: 3-2-1-1-0

• 3 copies of your data

• 2 different media types (local + cloud)

• 1 copy offsite (disconnected from network)

• 1 copy immutable (can't be encrypted or deleted)

• 0 errors (test your backups!)

Why the updates:

• Ransomware can encrypt cloud backups if they're connected

• Immutable backups prevent ransomware from destroying your recovery

• Untested backups fail when you need them most

What Should You Actually Back Up?

Critical (must backup, short RPO):

• Email and communications

• Financial data (accounting, transactions)

• Customer/client databases

• Proprietary intellectual property

• Active projects and work-in-progress

Important (should backup, moderate RPO):

• Employee files and shared drives

• Applications and systems configurations

• Historical records

• Vendor and contract information

Nice to Have (can backup, longer RPO):

• Marketing materials

• Old projects

• Reference materials

• General documents

Don't Need to Backup:

• Operating system files (can reinstall)

• Applications you can redownload

• Temporary files

• Cached data

Disaster Recovery Solutions by Business Size

Small Office (50-150 employees, simple IT)

Recommended solution: Cloud backup + basic DR

• Products: Datto, Veeam Cloud, Acronis Cyber Backup

• Cost: $500-1,500/month

• RTO: 4-24 hours

• RPO: 1-4 hours

What you get:

• Automated backups to cloud

• File and folder recovery

• Bare metal recovery (entire server)

• Basic testing

Mid-Sized Business (150-500 employees, moderate complexity)

Recommended solution: BCDR (Business Continuity and Disaster Recovery)

• Products: Datto SIRIS, Veeam Backup & Replication, Zerto

• Cost: $2,000-6,000/month

• RTO: 1-4 hours

• RPO: 15 minutes - 1 hour

What you get:

• Local backup appliance + cloud replication

• Instant virtualization (run servers from backup device)

• Automated failover

• Regular testing

• Screenshot verification

Larger/Complex Organization (500-900 employees, complex IT)

Recommended solution: Full DR site or enterprise cloud DR

• Products: Zerto, VMware SRM, Azure Site Recovery

• Cost: $5,000-15,000+/month

• RTO: 15 minutes - 1 hour

• RPO: Near-zero to 15 minutes

What you get:

• Continuous replication

• Automated failover to secondary site

• Full environment recovery

• Regular DR drills

• 24/7 monitoring

The Disaster Recovery Plan Document

Having technology is only half the battle. You need a written plan.

Your DR plan must include:

1. Emergency Contact List

   • IT team members (with home/mobile numbers)

   • Key vendors (backup provider, ISP, MSP)

   • Leadership team

   • Communication coordinator

2. Critical Systems Inventory

   • List of every critical system

   • RTO and RPO for each

   • Dependencies (what relies on what)

   • Recovery priority order

3. Step-by-Step Recovery Procedures

   • How to declare a disaster

   • Who has authority to activate DR plan

   • Specific steps to restore each system

   • Testing and verification procedures

4. Communication Plan

   • How to notify employees

   • How to notify customers

   • Who speaks to media (if applicable)

   • Status update frequency

5. Alternate Work Locations

   • Where employees work if building unavailable

   • VPN and remote access procedures

   • Equipment and resource allocation

6. Vendor Contact Information

   • Backup/DR provider: [Contact info]

   • Internet provider: [Contact info]

   • Hardware vendor: [Contact info]

   • Insurance company: [Contact info]

Critical: Print this document and store it offsite. If your building is gone, you can't access a digital-only DR plan.

Testing: The Part Everyone Skips (And Regrets)

Uncomfortable truth: 60% of businesses never test their backups until they actually need them—and 30% discover their backups don't work.

Testing schedule:

Monthly: File/folder recovery test

• Restore a random file from backup

• Verify integrity and usability

• Document results

Quarterly: Application recovery test

• Restore a complete application or database

• Test functionality

• Measure recovery time

Annually: Full disaster recovery drill

• Simulate complete facility loss

• Activate entire DR plan

• Test communication procedures

• Recover all critical systems

• Document lessons learned

Real example: A law firm discovered during their annual DR test that their case management system backup was corrupted and had been for 8 months. Because they tested, they identified and fixed the issue before it became a real disaster.

Cloud-Based Disaster Recovery

Benefits of cloud DR:

• No secondary data center needed

• Pay only for what you use (usually)

• Faster deployment than building DR site

• Automatic geographic redundancy

Leading cloud DR options:

• Microsoft Azure Site Recovery

• AWS Elastic Disaster Recovery

• Google Cloud VMware Engine

• Datto Cloud

• Zerto Cloud

Typical cost for 100-person company: $2,000-5,000/month

Trade-off: Requires reliable internet connectivity to recover systems.

What Disaster Recovery Actually Costs

Sample pricing for 200-employee company:

Basic Approach

• Cloud backup only: $800-1,200/month

• RTO: 24-48 hours

• RPO: 24 hours

• Annual cost: $9,600-14,400

Recommended Approach

• BCDR solution: $3,000-4,500/month

• RTO: 2-4 hours

• RPO: 1 hour

• Annual cost: $36,000-54,000

Enterprise Approach

• Full DR site with replication: $8,000-12,000/month

• RTO: 15 minutes

• RPO: Near-zero

• Annual cost: $96,000-144,000

ROI calculation: Average cost of downtime for mid-sized business: $5,000-10,000 per hour Average ransomware recovery cost: $84,000 Average natural disaster recovery: $250,000+

Even the "expensive" DR solution pays for itself if you avoid one major incident.

Common Mistakes

Mistake #1: Backing up to the same location as the original If your building floods/burns, both copies are gone.

Mistake #2: Never testing backups Untested = unverified = maybe it works, maybe it doesn't.

Mistake #3: No documented procedures Technology without process fails when stressed employees try to use it.

Mistake #4: Unrealistic RTO/RPO "We need everything back in 15 minutes" when you have basic backups. Set achievable targets.

Mistake #5: Forgetting about communications Your DR plan must include how to communicate during disaster.

Start Today: Your 30-Day DR Improvement Plan

Week 1: Assessment

• List all critical systems

• Define RTO and RPO for each

• Inventory current backup solutions

• Identify gaps

Week 2: Planning

• Research DR solutions appropriate for your RTO/RPO

• Get quotes from 2-3 vendors

• Create budget proposal

• Get leadership buy-in

Week 3: Implementation (if possible) or Selection

• Choose DR solution

• Begin implementation

• OR continue evaluating if budget approval needed

Week 4: Documentation

• Write or update DR plan document

• Create contact lists

• Document procedures

• Schedule first test

Get Professional Help

Disaster recovery planning is complex. Most mid-sized businesses don't have the internal expertise to design, implement, and maintain proper DR.

At Sigma Technology Consulting, we help businesses build comprehensive disaster recovery and business continuity plans.

We'll help you:

• Assess your current DR readiness (most businesses score 3/10)

• Define appropriate RTO and RPO targets

• Design cost-effective DR solutions

• Implement backup and recovery systems

• Create DR plan documentation

• Conduct regular DR testing

• Update plans as your business evolves

Schedule a free disaster recovery assessment. We'll evaluate your current state and provide a roadmap to real protection—not just backups.