Why Backups Fail: The Gaps Most SMBs Don’t Realize They Have

Most small businesses believe they’re protected because they “have backups.” But ask any experienced IT leader, having backups and being able to recover from them are two very different things.

And in 2026, attackers aren’t just encrypting your data… They’re going after your backups first.

When ransomware hits, hardware fails, files get deleted, or Microsoft 365 data goes missing, SMBs often learn the hard way that their backups weren’t as reliable as they thought.

Let’s walk through why backups fail, what gaps most SMBs don’t see coming, and how to build a recovery plan you can trust.

The #1 Problem: SMB Backups Are Set Up Once, Then Forgotten

Backups are not “set it and forget it.” Yet that’s what happens in most small businesses.

IT is busy. Schedules slip. Alerts get missed. Old systems get replaced but not reconfigured. Backup jobs silently fail.

And attackers love this.

The Most Common Backup Failures Inside SMB Environments

From our work across Ontario small businesses, these are the issues we see most frequently.

1. Backups Aren’t Running (or Haven’t Run in Months)

This is shockingly common. A job fails once… then never runs again.

Caused by:

• Storage limits reached
• Credentials changed
• Job corruption
• Network path disruption
• Device no longer connected

A backup that silently fails = no backup at all.

2. Backups Exist, but Recovery Is Extremely Slow

This is the nightmare scenario. The data is “there,” but restoring it:

• Takes hours or days
• Requires manual steps
• Breaks due to corrupted snapshots
• Doesn’t restore the system fully

If you can’t restore operations quickly, downtime becomes the real cost.

3. No Offsite or Immutable Copies

Local-only backups are not backups, they’re single points of failure.

Risks include:

• Ransomware encrypting the backup drive
• Fire/flood/theft destroying hardware
• Local corruption
• Accidental deletion

True protection requires redundant, offsite, and immutable copies.

4. Only File Backups (Not Full System Backups)

Many SMBs don’t realize this until it’s too late.

File backups won’t restore:

• Applications
• Configuration settings
• Servers
• Operating systems
• User profiles

You get your files back… but not a working system.

5. No Backup of Microsoft 365 Data

This is a major blind spot.

Microsoft does not back up your mailboxes, SharePoint, Teams files, or OneDrive the way SMBs think it does.

If:

• Data is deleted
• Retention expires
• Malware syncs encrypted files
• A user account is compromised

…you could lose access permanently.

Why SMBs Are More at Risk of Backup Failure

Small IT teams = too many priorities.

Backups aren’t neglected intentionally, there’s just not enough time.

Hybrid work creates new backup gaps.

Laptops move constantly between locations and networks.

Cloud adoption creates a false sense of security.

SMBs think “the cloud” handles their backups, it doesn’t.

Attackers target backups directly.

Modern ransomware seeks backup folders before encrypting anything else.

Signs Your SMB’s Backups Would Fail in a Real Incident

Here are the red flags we see right before a business experiences a major incident:

• You’ve never tested a full restore
• You don’t know your RTO (Recovery Time Objective)
• You don’t know where all critical data resides
• Your backups rely on a single system
• You don’t have immutable or offsite backups
• Your backup logs aren’t monitored
• Staff laptops aren’t fully backed up
• Microsoft 365 data isn’t backed up

If any of these describe your environment, the risk is real.

The Difference Between Backups and BCDR

Backups = “You have a copy.”
BCDR = “You can get running fast.”

Here’s the gap:

Backups protect your data.
BCDR protects your business.

SMBs need both, even if they think they’re too small.

What Reliable SMB Backup & Recovery Actually Looks Like

Here’s the practical version, the minimum viable setup for small businesses.

1. Automated, Frequent Backups

Every 1–2 hours for critical systems. Daily for standard data.

2. Offsite + Immutable Copies

Even if ransomware hits, your backups survive.

3. Full-System (Image-Based) Backups

So you can restore entire servers, not just files.

4. Independent Backup Monitoring

This is where SMBs fail. Backups need to be checked daily.

5. Regular Recovery Testing

If you haven’t tested a restore, it doesn’t work.

6. Microsoft 365 Backup

Mailboxes, OneDrive, SharePoint, Teams; backed up and recoverable.

A Backup Isn’t a Backup Unless It Recovers

Most SMBs find out their backups don’t work at the worst possible moment. But with the right setup, testing, and monitoring, recovery can be fast, controlled, and predictable.

If you want confidence that your backups will actually recover when it counts, book a consultation with Contego. We’ll test your backups, assess your recovery posture, and build a plan that keeps your business running, no matter what happens.