Planning for Emergencies: What to do when Life gets in the way of Work

On Wednesday, the day before Thanksgiving and three days before I had several large projects due, my dad suffered a stroke. My brother called at 8:00 am to let me know, and by 10:00 I had hurriedly emailed several clients to explain the situation, packed for several days, and was on the road.

I’m happy to say that due to fast treatment and my dad’s overall good health, he will likely make a full recovery.

But it got me thinking about my business, and how I can be better prepared for family emergencies and other things that can make work the last thing on my mind.

Financial Planning

As a self-employed service provider, if I’m not working, I’m not making money. Gone are the paid sick days, holidays, and vacations. So when I took off on a moment’s notice to be with my dad, I knew it was going to cost me. Including the cost of travel and the projects I had to bail out on, this two-day trip cost me about $750.

We were able to withstand that only because of careful financial planning. Long before I considered quitting my job, we paid off all the credit cards and the car, so the only debt we have is our home. We also built a decent emergency fund so we don’t have to worry if our income is down for a month or two.

Business Planning

I mentioned that I was forced to abandon some client projects, but others I was able to seamlessly hand off to other service providers. I have several friends who do similar work, and they were more than willing to step in and help my clients out. While not all projects could be as easily handled, it was niche to know that not all of my clients would be left hanging during my absence.

Working Smarter

One of the greatest benefits of being self-employed is not having a boss peering over your shoulder. But that also means no one is keeping tabs to make sure your projects are moving at a reasonable speed. If you’re inclined to procrastinate, this can be a problem.

I’ve had to learn to be my own very demanding boss, never allowing for lazy days when deadlines are approaching – even when they’re days away. Sure, sometimes you get so busy that you just can’t get things done until the last minute, but when possible, complete (or at least begin) projects as early as you can. It makes life a lot less stressful, and dealing with emergencies a lot simpler.

Building Passive Income

This is the one area where many service providers (myself included) seem to fail. As I said, when you’re self-employed, you need to be working if you want to make money. But there is another option: that so-called passive income. This refers to income streams that don’t require you to trade dollars for hours, like:

• Writing and selling eBooks or other instructional material.
• Selling PLR content.
• Affiliate marketing.
• Running a membership site.
• Selling advertising on a niche site.

Here’s the big myth about passive income, though: it’s not really passive. Sure, once you’re established you can walk away from your business for a few days or even weeks and continue to earn a paycheck, but getting to that point requires a lot of work. As David Perdew of MyNAMS.com says, “We work 18 hour days so we can make money in our sleep.”

However, combining a thriving service business with a passive income plan is a good way to not only emergency-proof your small business, but to even out the income peaks and valleys every small business owner experiences.

I’m lucky that I have fantastic clients who were very understanding, even though I left them hanging on several key projects. I’m lucky my business is portable, because if I had had to stay at my dad’s for an extended length of time, I could have continued to work. I’m lucky I had good friends I could call on to cover for me if needed.

But I also know that I need to look for more ways to protect my income from life’s catastrophes.

How do you prepare for emergencies in your small business? Leave a comment – I’d love to hear your tips!