Excellent, excellent, excellent, don_lewis93!
"recovery" versus "backup"
This is the most important distinction facing most website owners.
Why "backup"? To "recover".
First of all ... your web server WILL be hacked. Make no mistake about it, whatever protections are put in place by whoever WILL have holes, and exploits WILL be found.
Simply put: You MUST backup your data.
The definition of web "recovery" is that you'll NEED to get your website and its associated databases and whatnot back up and running in (near-)identical condition as quickly as you can.
Here's the thing: It is really quite easy to do.
1) What do you NEED to backup?
The HTML and image and script and ...whatever... files that make your website what it is. In other words, backup the entire folder that holds all of your website stuff. In a typical web server setup, this means every bit of that stuff in the /var/www/ (Unix) or /public_html/ (Windows) folder.
If you use databases, you need to have copies of what are called "dumps" from EVERY database that makes your website work. You know who you are ...
2) How often should I backup?
There are 3 answers to this question: Daily, Weekly and Monthly.
Daily: Everything website-related (as above)
Weekly: Same as Daily (for recovery beyond a Daily situation)
Monthly: All of the above, plus any "system files" that make the computer work (for quick replacement in case the computer is hacked ... although you should use the 'clean' Weekly or Daily backup to set up your web stuff on a new server, frankly. A hacked server is not to be trusted in ANY way.)
3) Why Daily backups?
Imagine that you have hired a new website developer and mistakenly given them permission to "do whatever you think is right". They royally mess up the files on your live web server. (ouch) Whaddyagonnado?
Copy the files from Yesterday's backup into the web stuff folders, and you're only one day behind. Problem solved.
4) Why Weekly backups?
Everything is cool with your website, but the server gets hacked on Tuesday and some of your Daily backups are questionable, for some reason ... while you are on vacation! (ouch) Whaddyagonnado?
Copy the files from the recent Weekly backup into the web stuff folders, and you're only three days behind ... until you can get a new, 'clean' server provisioned and set up. Problem solved.
4) Why Monthly backups? See above.
The point is that you simply MUST backup your web stuff if you hope to recover from a serious server problem quickly. And you MUST have the files available to you even if your web server has exploded or something. Do a backup that ends up with the files on your own hard drive or tape drive or CD or DVD, or whatever. Some place where you can get to them in the event of a serious malfunction at the server.
Remote backups are the most-likely method that a typical website owner would have available to them (as opposed to physical backups, like burning a CD for yourself), and must be investigated and implemented ASAP. If your business depends at all on web traffic, this is simply something that you cannot not do.
Google your options RIGHT NOW, if you don't have a satisfactory solution in place.