Have you ever endured a natural disaster? Hopefully the answer is no, but this study shows that the number of people affected by natural disasters around the world is rising. In the past few years, earthquakes, hurricanes, mudslides, fires, floods, and tornadoes have increased severely, costing millions in economic damage.
If you have not yet prepared your business for a natural disaster, ask yourself how long you would survive financially if you had to close up shop. If your area is ever affected, your business might suffer physical damage as well as data loss, which can lead to reduced profits and potentially even business closure.
Should a natural disaster ever impact your business, an offsite self-storage unit would help immensely in quick recovery of data, equipment, and documents, as well as other items your business needs in order to run smoothly. In this guide, we’ll show you that there are countless business-related components that would benefit from being kept in a climate-controlled, off-site, secured storage unit.
Climate Control: Do You Need It?
Do you really need climate control in your storage unit? The answer, in the majority of cases, is yes. A climate-controlled storage unit is kept between 55 and 85 degrees Fahrenheit and maintains stable humidity levels. Some common business-related items that benefit from climate control include:
- industrial equipment
- original copies of documents
- previous years' tax documents
If left in extreme temperatures and high humidity, industrial equipment comprised of metals are prone to rust. Electronics can also suffer from rust as well as water damage from humidity that render them useless. Your important documents can yellow and fade, and in extreme cases, grow mold and mildew when humidity is high. If your business requires you to keep any of these items or ones that are less commonly used by most businesses – such as wood, fabric, wine, or media such as DVDs and CDs – climate control is essential!
In addition to indoor climate control, the Insurance Information Institute recommends inspecting the outside of your unit to be sure that rising moisture from a flood or snowstorm cannot penetrate your storage. They also advise to check that the premises are thoroughly cleaned and that the owners have a permanent, reliable pest extermination contract. When weather becomes severe, pests become desperate for shelter, and the last thing you need damaging your goods are rats or cockroaches!
The 3-2-1 Rule
Many businesses rely on digital storage these days, but it's not fool-proof. The 3-2-1 rule says that there should be “three copies of the data, stored on two different kinds of media, with one of them stored offsite.” According to the United States Computer Emergency Readiness Team (US-CERT), the first copy is your primary copy and one of the two backup copies should be stored physically. This is helpful not only should a natural disaster strike, but also if a hacker were to access your online or cloud-based files.
It may be beneficial for a business to store important backup files in a storage facility that is located several miles outside of where the business is operated. For example, if you're located in Tampa, Florida, and the area is hit with a major hurricane and your business facility has significant damage, a nearby storage facility may have been affected as well (although your files and equipment will still be more protected in a storage facility than they would be in an open warehouse).
A report from the Graziadio Business Review tells us that in the early 2000s the number of data loss incidents due to hardware destruction from causes such as natural disasters was over 120,000. Although more current statistics on data loss and indirect loss due to natural disasters is scant, natural disasters have been on the rise, so we can probably expect that number to much higher in recent years. In the event of a natural disaster where you lose most of the physical aspect of your business, having important documents and equipment located far from the area of damage can get you back up and running much quicker than if you had lost everything in a nearby storage unit. Many storage companies will even pick up and deliver the items you want to store, so distance won’t create an issue for you when you need to drop off or retrieve important items.
Offsite Storage vs. On-Site Safekeeping
Storage units vary in size, and in order to know what size to rent, you need to know what to keep at your place of work and what to store.
If you don't use something regularly and it's not critical to day-to-day business operations, consider storing it. This prevents clutter and makes for a healthier work environment and customer experience. This method can also keep costs down: Plugged-in electronics that aren't in use will add to your electric bill, and piles of boxes laying around the office can impact air flow and require you to crank up the heat or air conditioner to reach a comfortable temperature.
Physical copies of records and the filing cabinets they are put into take up a ton of space. Ideally, you should keep the past two years' documents on site for easy access and store the rest. The Virginia Society of Certified Public Accountants outlines what paperwork is necessary for your business to retain and for how long. Most corporate records need to be retained permanently. Accounting records that should be kept indefinitely in the case of an IRS audit include:
- balance sheets
- financial statements
- income tax returns
- payroll tax returns
- sales tax returns
- profit and loss statements
- general ledgers
- cash disbursement and receipt records
- investment, sale, and purchase records
Accounting records that should be kept for seven years include:
- accounts payables
- accounts receivables
- bank statements
- petty cash records
- purchase orders
- expense reports
- charge and cash sales slips
- FICA/income tax withholdings should be kept for four years.
- Bank deposit slips and budgets should be kept for three years.
- Any paperwork involving human resources or payroll needs to be kept the entire duration of an individual’s employment and then disposed of after the legally-required timeframe.
- Worker's compensation benefits, employee withholding exemption certificates, and payroll records all need to be kept for a decade.
- Attendance records, medical benefits, performance records, personnel files, payroll checks, and time reports all need to be kept for seven years.
- Safety reports and life insurance benefits need to be kept for five years.
- Papers concerning family and medical leave (FMLA) and contract employees (from date of contract completion) need to be kept for three years.
- Retirement plan agreements and W-2 forms need to be kept indefinitely.
Items other than paper records that are beneficial to keep in storage depend on the type of business you run. These can vary wildly, including excess toiletries, supplies, equipment, inventory, furniture, and electronics. If the items in your storage unit are swapped out regularly, you can monitor it as a smaller-scale warehouse for your business!
Natural Disaster Readiness
Although the likelihood of your particular business being affected by a natural disaster may seem low, consider the statistics: Behind China, the United States has been impacted by the most natural disasters out of any other country, and we have suffered the most economic damage from them. We know you want your business to succeed, so a storage unit should definitely be a part of your contingency plan!