Disaster Planning for Your Financial Future

Hope for the best, plan for the worst is something that one of my old mentor always shared with me.

That's good stewardship. All you need to do is read the paper, follow the news on the web, television or radio to see the results of finances and nature running havoc in communities both here in the US and abroad.  Whether from bank failures, layoff's, earthquake, hurricane, tornado, fire or flood, the cost is high, both to communities and the businesses that serve them.

As we can see natural disasters aren't the only kind of unpredictable disaster that can occur; just look at the financial crisis now sweeping the globe. I've had emails from many small business owners who often (like many small businesses) borrow to make payroll, and their lines of credit have been reduced or canceled in recent weeks asking what they should do, where should they go? Is that a disaster? It meets my definition: sudden, sweeping in its impact and unpredictable in its timing......thus, I think the financial mess qualifies.

Do you  have a disaster plan? Do you have different forms of income that come from different areas of the country?

I hope so. If you do, is it up-to-date? If you don't have one - Why not? There are many tools available to help you! Remember, the point of all disaster planning is to continue during and after a disaster, or re-start as quickly as possible.

The following are things you should consider in your plan. Some of these probably aren't on your watch list, but should be.

Sudden loss of income: What is your Plan B? Do you have multiple forms of income? I can't tell you how many  people we have seen caught of guard  by being laid off, a medical issue or a family emergency that had no fall back, no savings. They were living today borrowing from tomorrow. So often they have no backup. Today's headlines focus us on the same thing. The US economy is hurting, we can't afford social security and banks and investors are far too leveraged.

Here, the solution is four fold: Have a line of credit (if you don't, it may take a while in the current environment until someone will give you one), have a cutback spending plan, have some savings and have a separate business or another form of income. We suggest looking at a Personal Franchise from the home a great plan b or back up solution. In some cases, having multiple franchises becomes a families overall focus.

Long Term Loss of Power. Just ask anyone in the Houston/Galveston area who went without power for three or more weeks after Hurricane Ike hit last month. How did that affect their ability to provide service? Your power loss does not have to be measured in weeks. It only takes hours to spoil food, or overheat without air conditioning; in just minutes you can lose your computers and its memory. We are so tied up in the electric grid that even a short power off situation can be critical. With predictions of rolling brownouts and blackouts in urban areas rife, what's your plan?

Flood--from above or below. While your insurance (hopefully) will make you whole if your roof leaks or the proverbial creek rises, it won't replace your data, or your key historical or legal documents. Use a safe deposit box for your key documents. Get your electronic data offside, all the time. Use one of the many low cost data backup plans that constantly back your information up to someplace else. I use Carbonite for my computers, but there are many players in this field. Lots of businesses on the Gulf Coast backed up their data on disk, or a second server and felt secure. When their entire building was destroyed, that security went with it.

Fire. Fire doesn't have to consume a building to ruin it.  The smoke and water damage from the automatic sprinkler can make a building uninhabitable for weeks or months. Again, getting key documents and data off site is crucial.

Snow, Sleet, Ice: Here the issue can be the difficulty of getting to your work site, as well as power loss. Carefully consider the pressure employees may feel to get to work in dangerous conditions. If you can, have a backup plan to allow certain staff to work from home in very bad weather. It's good for your staff, and it's a good move for the community at large: keep more people off the roads until things are safe.

Plan for the worst. Now. And then, hope for the best. But keep a careful eye on the financial markets and the weather!

Disasters such as bank closures, job loss, medical emergencies, hard disk crashes, viruses, tornadoes, wildfires, floods, snow storms, thefts, even spilled water or coffee can come at any time.