Freelancer’s Survival Guide: Emergencies

Artwork donated by Pati Nagle.

Freelancer’s Survival Guide: Emergencies

I am writing this in a hotel room in Boise, Idaho.  I’m not really on a vacation, but I did sorta plan for this trip.  I knew I’d be away, planned projects I could do on the road, and brought a lot of electronic hardware with me.  I feel a bit odd traveling with laptop, Kindle, iPhone, and iPod, but now that I’m here I’m happy to have it.

Especially the laptop. This morning, I answered e-mail, shipped materials to editors in New York and Italy, and answered a few queries.  I also put a few things off because I forgot to update my laptop calendar, so I’m clueless about the year ahead.  And I didn’t want to spend the few work hours I did have on things that would be better suited to do at home.

I also forgot my topic list for the Guide.  I’m in the middle of another novel again, and I get air-heady during novels. Really, I live in that world and just visit ours.  So the fact that I can function at all is pretty amazing.

Even though I planned for this trip, however, it put me in mind of the last trip I took to Idaho which I did not plan for.  Four years ago, my mother-in-law called.  Dean’s stepfather had died an hour before. The authorities had left, and now she was informing everyone.

The death was not a surprise.  Bill had been ill for the twenty years that I’d known him. But he was a strong man, determined, and a force of nature.  That he had left the planet was shocking nonetheless.

Within six hours, Dean and I gathered our finances, paid bills, juggled work schedules, called our house sitter who was miraculously free on such short notice, packed, and headed out of town.  We spent nearly a week in Boise, doing all that terrible work one does with a funeral, and then we made it home, exhausted, grieving, and re-entered our lives.

Although much of our work was at a standstill for that entire week, we lost only time.  Our businesses were fine, our finances remained healthy, and I doubt any of our editors/readers noticed we had dropped everything for a week to deal with a family emergency.  I don’t even remember if we informed anyone we were working with that we had left town.

We were able to do that for a variety of reasons.  The first is simply that we’re organized.  We know where everything is and how to deal with it quickly. The second is that we’re good at juggling schedules.  We figured out on the drive how to make up for the lost time.  The third is the advent of electronic communication.  We were able to stay in touch, even though we weren’t at home.  The fourth is the nature of our business.  Much of what we do does not rely on face-to-face contact.  We stayed in touch by cell phone, our house sitter monitors the home phone, and we made certain we had internet access wherever we went.

Even though we worked like crazy to prepare to leave town, we were able to do so in six hours.  Even though we were tired and disoriented when we got home, we didn’t screw up any projects or any possible jobs while we were away.

If this emergency—or one like it—had occurred fifteen years earlier, we would not have been so lucky.  Cell phones weren’t common.  Business did not occur on the internet.  We owned a business with 19 employees, and we supervised them.  We had a great manager, but she couldn’t do everything.

Whenever we traveled on planned trips, Dean found the nearest phone and spent an hour on it per call, giving orders, updating information, and running the business from the road.  I recall many times when we nearly missed our connecting flights because he was giving important information on a nearby payphone and couldn’t leave until he finished the conversation.

Emergencies happen.  We’ve dealt with one aspect of them in the insurance post. Please go back and reread that.  Insurance is extremely important to a small business.  In fact, I was just scanning a book called Killing Sacred Cows: Overcoming The Financial Myths That Are Destroying Your Prosperity by Garrett B. Gunderson to help Dean Wesley Smith prep for a class he was teaching on Money Management for Writers.  (It went well; he’ll probably teach it next year.  Check here for workshop links.)  Gunderson says that lack of insurance is one of the biggest reasons that small businesses fail.  (He says a lot of interesting things in that book.  I recommend it.  You don’t need to do all the stuff on his website, etc, but do read the book. It will change your attitude toward money, which will help you as a freelancer.)

Insurance can’t help you with the hidden costs of an emergency.  As the poor small businesses are learning during this horrible Gulf Coast oil spill, one of the most difficult aspects of an on-going emergency is predicting when it will end.  Not every emergency is finite and quantifiable.  Some go on for months—and in the case of the Gulf Coast—years.

Beyond having insurance, you must plan for all types of emergencies, and plan in ways you might not have considered.

First, let’s deal with finite emergencies.

Finite emergencies are things that happen and end quickly.  Things as dramatic as tornados are finite emergencies. But so are things like broken arms or a car accident.

Finite emergencies can be devastating, but they end relatively quickly, and you can usually measure their impact in both time and dollars.  If a tornado destroys your business, the destruction itself will take seconds.  You will then be able to assess the damage, figure out how long it will take to repair that damage, and whether or not you can afford to do so.  Uncertainties include things like whether or not your insurance company will pay for all of the damage or only some of it, whether or not you’ll be compensated for time lost, and whether or not you can accurately predict how much the weeks or months of rebuilding will cost you.

Finite emergencies often give you time to reassess whether or not your business is working as it should be.  Many businesses rebuild in a different location or use the opportunity to redesign their office/shop into something more efficient.  They upgrade computer systems, make the building more comfortable, or put in the state-of-the art equipment they’d always planned to buy but never had the time to install.

Freelancers who work for themselves can also use finite emergencies to reassess.  I broke my elbow ten years ago.  For some business owners, a broken arm is an inconvenience. I’m a touch typist who thinks faster than my fingers can move.  I tried to write with pen and paper; I also tried to type one-handed.  If I never had use of the arm again, I would have been able to relearn how to write.  But I knew I’d be able to type again in a few weeks, so I used the time to plan projects, research, and do things I normally didn’t have time to do.

A broken elbow, for me, actually caused work stoppage.  A broken elbow for someone who owns a retail store would be an inconvenience.  I broke my foot five years later, and didn’t stop work at all.  In fact, with a broken foot, I had more time to write because I had to stop exercise for a few weeks.  I wasn’t even allowed to use the swimming pool for two weeks because the doctor feared I’d damage the foot permanently getting in and out.

Planning for a finite emergency is relatively easy.

First, you need insurance for as many things as you can possibly insure.  Health insurance, disability insurance, fire insurance, flood insurance, business insurance—you name it, you should have the coverage. Again, look at the insurance post to understand why.

Second, you need an emergency fund—and it should not be credit cards.  You need cash in the bank to handle the unexpected occurrence.  Experts recommend that your emergency fund should be able to cover anywhere from three to twelve months of expenses.  Not every freelancer or every business can handle this. But if you have at least one month’s worth of expenses, you should be able to handle many of the finite emergencies that come your way.  Of course, in this case, more is always better.

Third, you need an emergency plan.  The plan should cover all types of finite emergencies.  If you live in tornado country, like I used to, then you need a plan for the various types of damage that a tornado can do.  I live on the Oregon Coast, where we have category one level hurricane type storms every winter (they’re not called hurricanes on the Pacific; I don’t know why).  We can expect at least two or three days of power outages per winter.  We can also expect some wind damage, usually in the form of downed trees or torn shingles off a roof.

Every ten years or so, we have storms that would be classified as category two or three level hurricanes if they occurred in the Gulf or the Atlantic.  The last time we had one (in 2007), we were without power for a week.  In fact, a fiber optic cable to our small town got severed in the mountains nearby, and we didn’t have cell phone service either. Everything was down.  We went from the 21^st century to the 19^th in a matter of hours.

We struggled during the aftermath of that storm.  The advantage I mentioned above—the fact that most of our business occurs on the phone or the internet—became a disadvantage.  After they cleared the roads, we had to drive forty miles to find civilization.  We went to restaurants, hauled out our laptops and phones, and informed the world that we were unavailable for the duration.  It cost time and since Dean also has an eBay business, it nearly cost him some customers. (It was December; people needed items by Christmas.  He managed to get them their items, but only because we recovered by December 12.  Had we been down another week, his eBay business might have been seriously harmed.)

We’ve lived through these storms for the past fifteen years.  We’d never had one that shut down cell services from all providers before.  But we now have contingency plans for that happening.  We’ve also had internet outages without power outages during our winter storms, so we bought smart phones after that horrible December, figuring we could use a cell connection to get online if we absolutely had to.

Those are strange contingencies, brought on by where we live.  I’ve also stopped doing exercises that could hurt my arms.  I realized during that spring of the broken elbow that my arms are important to my business.  I need to treat them the way an athlete would treat his body—as part of my income capacity.

When you’re a sole proprietor, or if you’re the only person in your small business who can do certain tasks, then you need to figure out what will happen to that business when you’re incapacitated.  Your finite emergency plans should address what happens on those occasions when you’re too sick to work, when you’re injured and unable to work, or when you’re incommunicado for long periods of time.

Do an accurate assessment.  It rarely hurts my business if I’m down for a few days, but my entire schedule gets screwed up if I’m out of commission for a week. If I’m working on a tight deadline, I might hurt my business if I’m sick for a few days and miss that deadline.  I was very lucky I didn’t get ill at the end of April, first of May because everything had piled up, and I would have missed four deadlines if I had gotten food poisoning or a serious flu.

I try not to allow my deadlines to get so close to the actual deadline for that very reason.  I plan in emergency time, sick time, downtime—and the occasional impromptu trip.   I try to have my work done a month or more before the actual deadline. Sometimes I turn a book or story in early. Sometimes I’m struggling to meet the actual deadline because illness or power outages put me “behind.”

The emergency plan becomes even more important if you’re the only one who can do the job. What happens if you’re unavailable? Ill? Out of communication range?  Have a back-up for the two-day emergency, the week-long emergency, and the month-long emergency.  And remember: sometimes it’s just better to close the business for a few days to solve the problem than it is to have someone who is unfamiliar with the tasks attempt them.

The emergency plan should cover as many finite emergencies as you can think of.  Write the plan down—and make sure that the people upon whom the plan relies know where to find it.  Also, make sure they understand it.  A note like If I’m gone, Suzy’s in charge, probably won’t help in most cases.  Write out the plan point by point. That’s even more critical if you’re a sole proprietor and the only one who can do the job.  Instruct the person who is answer the phone or dealing with the e-mail on how to tell clients that you’re unavailable.

In some businesses, telling a client that you’re gone for weeks having cancer treatments might make the client flee the business because they’ll fear that the business is in trouble.  Telling them that you’re dealing with a prolonged family emergency on the other hand will be easy to understand and doesn’t give out any unnecessary particulars.

Finite emergencies are awful and sometimes difficult to handle, but they are measurable.  The worst situation you can find your business in is an ongoing emergency.

Right now, small businesses all over the Gulf are in a state of ongoing emergency.  No one knows how long this oil spill will last, what communities it will effect long-term, and what the area will look like when the last drop of oil gets contained.  That doesn’t count the environmental impact or the PR nightmare that many tourist-oriented businesses are facing.

I live in a tourist town.  When our nearby big city’s weather reporters say that we’ll have torrential rains or cloudy days (in the summer), the tourists don’t show up.  After that major storm I mentioned above, the local Portland news reported repeatedly on the “devastation” on the coast. The devastation was limited to one town up north, but the rest of us saw no tourist business in all of December, even though local businesses were fine.

The Gulf Coast is facing this same problem on an infinitely larger scale.  Tourists probably won’t show up this summer. But what about next summer? Or the summer after? It depends on what happens there, and the PR that comes out of the area.  If no one says that such-and-so beach is fine, then the tourists will not come back to that beach no matter how pristine the sands are, devastating all the tourist-related businesses in the area.

And that doesn’t count the businesses that rely on a clean and healthy ocean.  In 1999, an oil tanker called the New Carissa spilled oil along the Oregon Coast.  We suffered a very tiny version of what’s happening in the Gulf.  The Oregonian newspaper published an article this week on one oyster harvesting business, and the impact that oil spill had upon it.  Follow this link and read the article.

Then ask yourself how you would deal with that kind of ongoing emergency.  Clausen Oysters, the company in the article, did amazingly well, considering. They still have a business.  Most people wouldn’t.

Ongoing emergencies are harder to plan for, and even harder to live through.  Let’s use the example of Clausen Oysters.  It took the company ten years to recover from the New Carissa spill.  For four years after the spill, the company had no income.  I suppose you could save that kind of money and try to ride it through, but that’s unrealistic for most small businesses.

Here’s how you have to think about ongoing emergencies.

First, realize that there are a variety of ongoing emergencies.  If the owner of a business suddenly gets ill—and the illness will take a long time to recover from, if recovery is even possible—then the business needs to have a plan for someone else to take charge.  That plan needs to have an implementation clause.  Meaning—who decides when it’s right to install the new boss?  The incapacitated owner? (And what happens if that person is in a coma?) The board of directors, if there are any? The employees? The owner’s family?

Decide these things before the emergency and have a plan in writing to deal with whatever you can foresee.

The same goes for physical emergencies.  For example, not all disasters are finite.  A tornado may wipe out a block or even a small community, but generally not a region.  A hurricane, on the other hand, can wipe out an entire state or area, as we learned during Katrina.  And as we learned, the Gulf Coast region hadn’t yet fully recovered when the oil spill hit.  What does not fully recovered mean?

In human terms, it means that people hadn’t finished rebuilding their lives yet. The population is still down in New Orleans.  Entire neighborhoods in Mississippi are still shut down and boarded off.  Businesses are still fighting insurance claims from 2005.  And the tourists hadn’t completely come back yet.

Disasters sometimes come in waves, just like the Gulf is suffering now.  A community in rural Eastern Oregon suffered devastating fires three years in a row due to the annual fires we have in the mountains here.  The community hadn’t had any fires near the city limits for decades before that.

Sometimes your business might recover, but the area around you does not.  If you have a job like mine, which doesn’t depend on foot traffic, you can survive that neighborhood shift.  But if you own a restaurant or a retail store, you might have to move or shut your doors because no one comes to that neighborhood any more.

In the midst of an ongoing emergency, one discussion you have to have is whether or not the shut down the business.  Sometimes it’s better to walk away than it is to continue in a terrible environment.

It’s better for a sole proprietor to have a list written concurrently with the emergency plan of times when the business should be abandoned due to crisis. That way, you’re not making the decision in the middle of the crisis.

The worst thing about an ongoing emergency is the unpredictability of it. If you’re an optimist—and deep down, you have to be to own your own business—then you’re going to want to believe the best case scenarios.  Often, in an ongoing emergency, the best case scenario is wrong.  Believing it might prevent you from walking away from a situation at the wrong time.

What happens if you wait too long in an ongoing emergency to walk away?  You can’t cap damages.  You can’t put a financial value on what you’ve lost.  Worse than that, the waiting and the fight to survive will damage your own personal finances, as well as your ability to get other work.  They’ll damage your relationships, and they’ll damage your health as well.

Rarely does anyone talk about the effect of stress on business owners in any sort of emergency situation.  In a finite emergency, the stress is there, but survivable—partly because we know roughly when the end will occur.  However, in an ongoing emergency, the stress can last for a year or ten years.  Stress raises blood pressure, causes illness, and leads to heart attack and stroke.  You might want to wait out the ongoing emergency, but the toll it will take on your health might prevent you from ever reopening your business again.

When you sit down to make your emergency plans, look at every scenario you can think of.  Imagine every single worst-case disaster, and then take a good hard look at your own health and your stamina.  Could you survive the last ten years like the owners of Clausen Oysters?  Or would you (or your family) fall apart?

Be as honest as you can.  Figure it out.  Make plans.  Revise those plans every few years as your business grows and changes.  What you decide today might not apply five years from now.

Realize too that some emergencies will have elements of the finite and the ongoing.  When my father died in 1990, I expected to return to work after a short mourning period.  Had I waited tables, I could have done so within the week. But my grief for my father, for some reason, robbed me of the ability to read and write.  I simply couldn’t concentrate. For six months, I couldn’t practice my business, no matter what I did.

I managed to survive that, but I made a mental note of that.  When my mother got very ill, I added a six-month grieving period to my emergency plan.  However, when she died, my grief didn’t take the same form, so I didn’t need to use that plan.  But it was in place, just in case.

For people who live through tornados or other natural disaster, the finite emergency might become ongoing because the finite emergency triggered health problems or financial issues that will take years to resolve.

When it comes to emergencies, follow the old cliché: Plan for the worst and hope for the best.  Your life will be much easier if you do.

“Freelancer’s Survival Guide: Emergencies,” copyright © 2010 by Kristine Kathryn Rusch