5 Ways to Avoid Financial Disasters

05 May 5 Ways to Avoid Financial Disasters

racing_toward_disasterDisasters happen. That’s why you must plan ahead and protect yourself from a worst-case scenario. Disasters only have a huge impact on your life and your business when you’re not ready for them.

Let’s not even talk about economic collapse, recession, depression, unemployment rates, business failures, corporate cutbacks, government shutdowns, the deficit, or world chaos. Let’s talk about the things we can relate to!

  • Nature can cause problems.
  • Health issues can set you and your business back.
  • You can fall victim to thieves.

There’s no telling what the future holds. So be prepared!

#1 Make Sure You’re Insured

Speak with your insurance broker to make sure you have enough insurance to protect yourself in the event of theft or a natural disaster. You may also want to make sure your business is protected against any legal action. Finally, make sure your health insurance is up to date and accurately covers your needs.

#2 Protect Your Information

There are two steps to take here. The first is to make sure you have a reliable back-up system. Make sure your website and business information are saved in two locations. Create a system to back up regularly.

The second step is to protect your information from hackers and identity thieves. This may mean identity theft protection. It may also mean taking extra security measures with your website, personal information and protections.

#3 Think, “What’s the Worst That Can Happen?”

You’ve likely heard the phrase, “Plan for the worst, and expect the best.” That’s exactly what you want to do for your business. Cover yourself and your customers or clients. Make sure your legal documentation is up to date and accurately protects you.

Make sure your policies and procedures are legal and available to your public. Make sure you’re paying your taxes and accurately recording your income and expenses. Plan for the worst – for example, an IRS audit or a lawsuit – and expect the best.

#4 Be Financially Savvy

Have an emergency fund. Many finance experts recommend saving at least six months of income. That way if you have a health emergency or illness you have six months of income to live off of.

#5 Be Ahead of Your Time

Plan for the future of your business and take action. If you have a three month, six month, one year and a three or five year plan, you’re ahead of the game. And if you’re already taking action on those plans you can afford minor setbacks as they won’t interrupt your growth too much.

Disasters happen to everyone. Yet when you’re prepared for them they seem to happen with little or no impact. Proper planning and careful attention to the foundation of your business are key. Take steps to make sure you have good insurance, savings, legal and financial documentation and security. You can be confident you’re prepared for whatever life throws at you.

27 Comments
  • Andrew J. Gay
    Posted at 10:18h, 05 May Reply

    Sound advice Loral! I know from experience the pains that come from financial disaster, I’ve found that whatever your plan is, go ahead and do just a little more. You have to plan for the unthinkable, therefore you have to think about it. Also, a good exit strategy would be key wouldn’t it? At some point you have to say enough is enough and get out right? And that point would need to be quite a ways from the financial disaster point.

    • Anonymous
      Posted at 15:45h, 06 May Reply

      Hey Andrew, Yes and yes. An exit strategy is key. Love that.

  • Jessica Shouppe
    Posted at 10:29h, 05 May Reply

    Awesome advice Loral!
    Having lived through a financial disaster in my life, I have a healthy respect for the advice you’ve laid out here, especially having six months of income in savings. Planning for disaster is something many people forget to do, particularly in their businesses. I hope everyone takes this advice to heart

    • Anonymous
      Posted at 15:54h, 06 May Reply

      Mm. Yes. Cash in the bank is a good thing. Of course, I always advise making more of it and investing in your Cash Machine so it grows faster. Creating new cash is where it’s at. Thanks for your comment, Jess.

  • Rick Cooper
    Posted at 10:30h, 05 May Reply

    Thanks Loral. I agree especially with your point #3. Planning is so important to protect your information. Think through a few possible scenarios and how you would handle them. This can often give you some important insights as well as some action steps.

  • Rick Cooper
    Posted at 10:41h, 05 May Reply

    Hi Loral. Great post. I loved the point you made in #3. Planning is so key to being prepared for possible issues. Think through a few possible scenarios and how you would respond to them. This is a great way to determine action steps to get prepared.

  • Gary Loper
    Posted at 12:24h, 05 May Reply

    In business as well as life The Same Rules apply, create a long term plan of where you are going, communicate with your team to have them share their vision of your direction, and what I feel is the most important way that was brought several times is to have back plans, for cash flow, information/data, cash reserves and how to use what we have to reinvent.

  • Debe Fennell
    Posted at 10:23h, 05 May Reply

    This is great stuff for any business or just personal finances! Life is full of disasters and it’s how you react to those unexpected snags in life that determine how well you come out the other side. Having your ducks in a row before is a huge step in making sure your survival will be less painful. Great advice, Loral!

  • Ken Course
    Posted at 10:28h, 05 May Reply

    One thing to think about as part of your disaster recovery plan is what would happen in the event of catastrophic data failure as well. What would happen if your computer or your website were gone tomorrow? Do you have a backup, or better yet, multiple backups? If not, it’s time to start looking into how you can get that done. For most of us, if you lose your accounting data or your important files, you’re out of business!

    • Anonymous
      Posted at 15:48h, 06 May Reply

      Just what I’d expect you to be thinking about. That’s our Internet Marketing 101 Coach folks. Pay attention! He’s right. That would be a catastrophe! Thanks, Ken.

  • Tracy Blay
    Posted at 10:35h, 05 May Reply

    Awesome advice Loral. We all need to be ready for anything life throws at us.
    Thank you

  • Elena Calvillo
    Posted at 10:45h, 05 May Reply

    I’ve heard a LOT lately on protecting your information, particularly from hackers and identity thieves. I understand the importance and curious to know where to go to begin setting up a backup and protection system…what’s the first step? Will I have to shell out a lot of money to put these in place? As always Loral, thanks so much for the fantastic information!

    • Anonymous
      Posted at 15:43h, 06 May Reply

      That’s what we’re all about! The Fast Cash Coaching program entrepreneurial center has that info and more. Check it out. Thanks for your questions!

  • Sandra McFadin
    Posted at 10:49h, 05 May Reply

    This is a good reminder to set aside. The past few years have been very challenging for a lot of people & business. Many people I know have opted to cancel insurance or use their “cushion” money just to pay the bills when the hard times hit. Once the pendulum swings upward again, this is the first order of business- to set aside and build up again. Thanks again for the good info!

    • Anonymous
      Posted at 15:41h, 06 May Reply

      Thanks, Sandra. I know what you’re saying. We just need to remember we’re in control of how much money we make!

  • Rebekah Hall
    Posted at 10:53h, 05 May Reply

    It’s amazing how these important areas get put on the back burner to a ‘someday’ pile. The best way to impede your forward progress is to not be prepared with the basics. Thanks Loral!

  • Sandra McFadin
    Posted at 11:25h, 05 May Reply

    p.s. I LOVE that graphic, and isn’t it apt…a “glitch” can quickly turn into a “Problem” and a problem can quickly turn into “disaster” the graphic kind of puts it into perspective! 🙂 Thanks for the laugh.

    • Anonymous
      Posted at 15:39h, 06 May Reply

      Hey Sandra, Yes! It is clever. Gotta love it. That’s one of the best things about having a great team on your side. Thanks for noticing!

  • Donna Lassetter
    Posted at 11:42h, 05 May Reply

    Thanks Loral for reminding us to have a plan in place for the bumps in the road! We plan for everything else but the bumps and valleys along the way. Great info!

    • Anonymous
      Posted at 15:50h, 06 May Reply

      Exactly why I talk about it, Donna. TY!

  • Justin Yarmark
    Posted at 11:53h, 05 May Reply

    I like the idea of being pro-active vs reactive to current business conditions and unpredicted business circumstances.

  • Mark Garratt
    Posted at 12:33h, 05 May Reply

    Sage Advice as no one is immuned to disasters. The arrows come from all directions (even so called friendly areas) . The only way to sleep at night is to be prepared for them. Thanks!

  • Valerie
    Posted at 20:32h, 05 May Reply

    Plan ahead… let me put that on my list of to do’s…..
    Thank you for the wisdom

    • Anonymous
      Posted at 15:38h, 06 May Reply

      Ha ha! Now there’s a step in the right direction. But taking ACTION is in crossing if OFF the list because it’s done. TY for your comment, Valerie.

  • Freddievillacampa
    Posted at 22:00h, 07 May Reply

    Loral? i lived here in the Philippines. It is possible that i can join your coaching program?

  • Freddievillacampa
    Posted at 22:02h, 07 May Reply

    Loral are you one of GetMotivated Seminar’s Speaker?

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