Disaster Planning For Entrepreneurs*
As in the wake of 9-11, we have seen businesses paying more attention to their disaster plans in the days after Katrina. Red Herring has telling examples from the technology sector.
Here are some suggestions on how entrepreneurs can prepare for disasters:
1. I would suggest for any business that the cliche' "Cash is King" has never been more true. After Katrina, there will be a prolonged period where many businesses almost ground to a halt. Having cash reserves will allow businesses to make it through the initial economic paralysis. Thirty days cash reserves (enough cash to cover essential and fixed expenses) would be my minimum recommendation. Even ninety days of reserve would not be too much to have at this period of time. One business owner recently told me that the new goal that many are setting is six months of cash on hand.
