[backup] Make exact copy of USB keydrive to run appliance?

Hello,

I run an ARM-based appliance off a USB keydrive with Debian.

As backup in case the keydrive goes south, I'd like to make an exact copy that I can use to build a new key and be back in business fast.

1. What software would you recommend?
2. Can the target keydrive be smaller (eg. 4GB instead of 16GB), provided it's big enough to hold the output image, or does it have to be at least as big as the original?

Thank you.