A couple of times in my computing life, I've had that sinking, cold pit in my stomach where I realized that I've lost data and have no backup. It's not a fun moment, but, fortunately for me, the data wasn't irreplaceable. I was stupid, but lucky. With some websites taking hundreds of hours of input, I can't afford to take that chance. We take regular backups and send them offsite. What's the point of a backup if it gets destroyed or stolen with your computer? Or subject to ransomware?
If you own a computer, you MUST ask yourself 2 extremely important questions? 1. Would it matter if I lost all the data on this computer with no way to retrieve it? And 2. How long would it take to rebuild this data and how would it affect my business? And you must also be able to answer them - even if it means realizing that the repercussions would be disastrous.
What's worth backing up?
Any information that is crucial to the continuing smooth operation of your business. It may be as complex as technical drawings, to invoices, to the lowly email. Whatever contributes to your day going well is worth backing up. And, with storage space so cheap (even free), why wouldn't you back up everything?
How should I back up?
Unless you're very disciplined, or have a staff member who's job it is to do it, automate your backups. Don't rely on remembering to do it. Murphy's Law says you'll forget to do it the one time you actually need it.
Send your files offsite. By all means keep them onsite as well - flash drive, NAS, external hard drive - but get them offsite so that, in the event of a total loss at the office, there's another copy out on the cloud. There are many cheap or free places to do this. We use Amazon S3 which is paid, but hardly expensive. We pay about $5 per month for what we have stored (you pay per Mb/Gb). Then there's Dropbox, Google Drive, SugarSync, lots of options. Do your research and see what programs interface well with what storage.
How often should I backup?
This will depend on what sort of lifespan your documents and data have. For ecommerce sites, we will back up daily (sometimes more for very busy sites). For more static sites, once a month. Ask yourself what time period of data you can afford to lose. If you change content and data multiple times a day, consider more often (or get a program like AutoVer that automatically backs up changed files as soon as you save them).