Will Politics Affect our 2007 Business Plans?

December 27, 2006

It is that time of year again. Time to end one year and move onto the next. I always spend some time each year reviewing what I accomplished in the year and set plans for the next. On that note, I will likely share a few thoughts in that regard here on Buzzscreen in the next few days.

My question this time around is: When we set our entrepreneur plans for 2007, do we need to take political happenings into account? I work online exclusively, so in my case I need to pay attention to how politics could affect the internet. And as a web entrepreneur, much of my income comes from advertising and e-commerce - both of which can be dependent on people’s residual income. When looking at the scene this year, there are a few things happening which could affect the economy. The biggest issue is the war on terror and the instability in the Middle East. That area is a powder keg and the current president of Iran is a nutcase who seems intent on creating nuclear weapons so as to blackmail the United States and wipe out Israel. The war in Iraq is a mess and nobody really knows what we’re going to be doing there. I don’t intend to debate the merits of any of this, but the issue at hand is how this could effect our businesses and the web. Simply put, a full-out war in the Middle East and/or a terrorist attack in the United States could wreak havoc on our economy. Additionally, depending on the severity and location of a terrorist attack, such an event could take out chunks of the internet backbone, affecting the speed of the net.

I am a believer in moving forward with eyes wide open. I am not one who likes to scare anybody and that is not my intention. I think today’s press are “merchants of chaos” and actively sell a dangerous world to all of us for the purposes of ratings and money. But, with today’s inter-connected world and the “merchants of chaos” getting so much attention, all world problems are magnified. While the world is usually not as dangerous as it seems on TV, the fact that it is on TV so much leads people to think the world is dangerous, and unfortunately perception is too often reality.

What do we all do about all this? We work hard, we work to help others, and we flourish in our personal lives. But, at the same time, we take certain actions in our business to safeguard our assets. Some basic actions I might recommend to any internet businessperson are:

Maintain a solid backup strategy that backs up your entire website (or sites) locally. Do not depend on your web hosts backup only because that is dependent on their location. Set up systems to backup to another geographical location, preferably in different city from where your web server is located.
Diversify your income sources. This is just smart business, but it also provides a safety net in case something happens that reduces or takes out one of your sources of income.
Build up financial reserves. I try to sock away 5-10% of GI per month. Sometimes its hard to do that, but its a goal to strive for. And I recommend putting the reserves into a separate bank account. This leads to less chance that you will be compelled to use it. The reserves can be used as a growth fund at times where capital is needed, but it can also be used to fill in the gaps during periods of low income. In my case, I have enough put aside to support my lifestyle for 3-4 months with zero income at all. A case of zero income is not likely to happen, but its smart to plan for that “just in case” scenario, especially when working as an entrepreneur over the internet.

Those of us working on the internet should not ever assume that things will remain as they are. It is true that the internet is never going to go anywhere, but at the same time, the internet is about the most ever-changing medium for business that there is. And it is not immune to the physical world. The internet has never been through a world war or other major world event. Its fairly safe to assume that, should such a thing happen, the internet will change somehow.

Don’t plan for it, but be prepared. The only thing constant in this world is change.

Advice