It happens all too often. I client calls us and tells us they just deleted a folder or a file that was extremely important, usually for a presentation that is to be made in no more than 30 minutes. Now, if they have backups on our backup servers, that is fine, we restore the file in no time because they are available right there. This isn't the normal situation though, most people don't feel that making backups is important, or think that we just do it because they have the server with us (we don't). If these backups don't exist, and your server crashes, gets hacked, explodes, runs away, or heaven forbid a natural disaster occurs, your data is gone. There is no way around it. That is why making sure you have backups of all of your data is so important.
The first thing thing you need to do is figure out where you are going to store backups. You can store them in one place, and that would be fine, but it also leaves a single point of failure. I would recommend keeping your backups in at least two places, perhaps keeping a copy on your home computer, and one at a remote backup server. You could also just use two remote servers in different physical locations. We do have backup servers in our data center, just ask your account executive if you are interested.
After you have figured out where you want the backups to go, you should figure out what data is important enough to you to backup. The best way to go about this is to just backup everything short of the operating system itself. Get all of your web content, settings, databases, mailboxes, dns zone files, user accounts, and the list goes on.
With cPanel, this is easy. There is a built in backup function that will automatically backup all of your stuff daily. If something were to happen, all you would need to do is move the backup files to a new cPanel server, and restore them. It will restore everything back to it's previous functionality relatively quickly. Windows, with or without a control panel, is pretty easy as well. It has a program called ntbackup that you can schedule backups with, all you need to do is choose the location, the files and folders to backup, and when to do it. It will do the rest for you. If you run a Linux server without a control panel, setting up backups can be a bit more complex without a backup program. You can use a mixture of tar, cron, and scp or ftp to run backups when you would like. If you need help with something like this, just let us know, we would be glad to help.
I cannot stress this enough, making backups of your data is absolutely vital. If you use your server to host sites or applications that bring you money, not having backups is like asking to lose it all in a second. If you keep backups, you may have some downtime, but at least what is important to you can be recovered.