How to Back Up Your Business Data (And Why Most Sole Traders Don't)

The Accounted Editorial Team·3 March 2026·7 min read

Here's a question that might make you slightly uncomfortable: if your laptop died right now — completely and irreversibly — how much of your business would you lose?

Your invoices. Your client list. Your tax records. Your contracts. That spreadsheet you've been meticulously updating for three years. Gone.

If the answer makes you wince, you're not alone. The vast majority of sole traders don't have a proper backup strategy. Some have never backed up anything at all. It's one of those tasks that feels important but never quite makes it to the top of the to-do list — until disaster strikes.

Let's fix that today.

Why Most Sole Traders Don't Back Up Their Data

"It Won't Happen to Me"

This is the big one. We all know, intellectually, that hard drives fail, laptops get stolen, and ransomware exists. But there's a stubborn part of the human brain that assumes bad things happen to other people. The statistics tell a different story: roughly one in twenty hard drives fails each year, and the average lifespan of a laptop hard drive is three to five years.

"I'll Do It Later"

Backing up your data doesn't feel urgent. There's no deadline, no client chasing you, no invoice to send. It's purely proactive — and proactive tasks are the first to get pushed aside when you're busy.

"It's Too Complicated"

Ten years ago, this might have been a fair excuse. Setting up a proper backup used to involve external hard drives, scheduling software, and a degree of technical know-how. Today, it's genuinely simple — if you know where to start.

"I Don't Have Much Data"

You might be surprised. Even a sole trader with a modest business accumulates years of invoices, expense records, client communications, contracts, and tax documents. Recreating all of that from scratch would be somewhere between painful and impossible.

The 3-2-1 Backup Rule

If you remember nothing else from this article, remember this: 3-2-1.

3 copies of your data (the original plus two backups)
2 different types of storage media (for example, your laptop's hard drive and a cloud service)
1 copy stored offsite (somewhere physically separate from your home or office)

This isn't paranoia — it's common sense. If your laptop and your external hard drive are both sitting on your desk and your office floods, you've lost everything. Having a copy in the cloud means that even in the worst-case scenario, your data survives.

How to Back Up Your Business Data

Step 1: Identify What Needs Backing Up

Start by listing the data that matters most to your business. For most sole traders, this includes:

Financial records — invoices, expense receipts, bank statements, tax returns
Client information — contact details, contracts, project files
Business documents — proposals, quotes, terms and conditions
Email — if you use a desktop email client rather than webmail
Software data — anything stored locally by business apps

If you're using cloud-based tools like Accounted for your bookkeeping, your financial data is already backed up automatically on secure servers. That's one less thing to worry about. But anything stored only on your local machine needs a backup plan.

Step 2: Choose Your Backup Methods

You've got three main options, and ideally you'll use at least two of them.

Cloud Backup Services

Services like Backblaze, Carbonite, and iDrive automatically back up your entire computer to the cloud. You install the software, choose what to back up, and it runs quietly in the background. If disaster strikes, you can restore everything — or just the files you need — from any device.

Backblaze is particularly popular for its simplicity and price: unlimited backup for around £6 per month. It's hard to argue with that.

Cloud Storage (Sync Services)

This is different from cloud backup, though the two are often confused. Cloud storage services like Google Drive, OneDrive, and Dropbox sync specific folders to the cloud. Files you save in those folders are automatically available online and on other devices.

We've written a detailed comparison of cloud storage options if you're not sure which service to choose.

The key difference is that cloud storage only covers files you put in the synced folders, while cloud backup covers everything on your machine. For the best protection, use both.

External Hard Drives

An external hard drive is the simplest form of backup. Plug it in, copy your files, and store it somewhere safe. Modern external drives with 1-2 TB of storage cost well under £50.

The downside is that you have to remember to do it. Most people are diligent for the first week and then forget entirely. If you go this route, set a recurring weekly reminder in your calendar.

Step 3: Set It Up and Forget It

The best backup is one that happens automatically. Cloud backup services run without any input from you once they're set up. Cloud storage syncs in real time. Even external hard drives can be scheduled to back up automatically using built-in tools like Time Machine on Mac or File History on Windows.

The goal is to remove yourself from the equation as much as possible. If your backup depends on you remembering to do something, it will eventually fail.

Step 4: Test Your Backups

This is the step almost everyone skips. A backup you've never tested is a backup you can't trust. Once you've set everything up, try restoring a file. Make sure it comes back intact. Do this every few months to catch any problems early.

What About HMRC Requirements?

HMRC requires you to keep business records for at least five years after the 31 January submission deadline for the relevant tax year. If you're VAT-registered, you need to keep VAT records for six years.

These records need to be accurate and accessible. If HMRC asks to see your records during an investigation, "I lost them in a hard drive crash" won't go down well. Having proper backups isn't just good practice — it's a genuine safeguard against a potentially expensive compliance problem.

If your accounting software stores data in the cloud — as Accounted does — your financial records are automatically retained and accessible. But make sure any records stored locally are covered by your backup strategy too.

Common Backup Mistakes

Only Backing Up to an External Drive at Home

If your external drive is next to your laptop and both are destroyed in a fire or flood, your backup is worthless. Always have at least one offsite copy — cloud backup is the easiest way to achieve this.

Not Backing Up Email

If you use a desktop email client like Outlook, your emails may be stored locally. Losing years of client correspondence can be devastating. Consider switching to a cloud-based email service (Gmail, Outlook.com) where your emails are stored online by default.

Relying on a Single Cloud Service

Cloud services are extremely reliable, but they're not infallible. Having a second backup method — whether that's another cloud service or an external drive — protects you against the unlikely but not impossible scenario of a provider having a serious outage or data loss.

Forgetting About Phone Data

If you use your phone for business — taking photos of receipts, communicating with clients via WhatsApp, storing notes — that data needs backing up too. Both iCloud and Google automatically back up your phone, but make sure the feature is actually turned on.

A Simple Backup Plan for Sole Traders

If all of this feels overwhelming, here's a straightforward plan you can set up in under an hour.

Sign up for Backblaze (or a similar cloud backup service) and let it back up your entire computer. Cost: around £6 per month.
Move your important business files into Google Drive or OneDrive, so they're synced to the cloud automatically. Cost: free for up to 15 GB (Google) or included with Microsoft 365.
Buy an external hard drive and set up automatic weekly backups using Time Machine or File History. Cost: under £50 one-off.
Check that your phone backup is enabled — iCloud for iPhone, Google One for Android.
Test a restore to make sure everything is working.

That's it. Three different backup methods, covering the 3-2-1 rule, for less than the cost of a takeaway coffee each week.

For more ways to protect your business digitally, have a look at our guide to cyber security for sole traders. And if you're reviewing your broader digital toolkit, our roundup of the best free tools for small businesses in 2026 is a good starting point.

Don't Wait for Disaster

The best time to set up backups was years ago. The second-best time is right now. It takes less than an hour, costs very little, and could save your entire business one day.

You wouldn't run a business without insurance. Think of backups the same way — except they're cheaper, easier to set up, and far more likely to actually save you.

Accounted helps UK sole traders stay on top of their bookkeeping and tax. Start your free 30-day trial at getaccounted.co.uk

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