What’s the #1 catastrophe that can put your out of business? It’s not competition. It’s not the economy. It’s not even a fire, flood, or hurricane. It’s the almost-guaranteed failure of that little magnetic disk spinning away inside your computer. If you’re not prepared, you may be cooked.

I’m in the business of backing up hundreds of thousands of PCs. So we get a lot of sob stories in the mail. Consider the following one from a gentleman in California:

“I have owned a remodeling company that I started back in 2002. This is my story, I wish that I could make it funny, but the fact is there was nothing funny about it. Back in the fall of 2005, I had a fatal computer error. I lost all of my business financial records on QuickBooks, my client records, anb CADD drawings of current and future business. I had lost everything; it took me 6 months to get my financial records back in some type of order. As far as the customer records and drawings go, that was a bigger nightmare. I was months behind, trying to recreate the drawings and contracts and other construction documents that were lost. Losing all of that information was something that I have never been able to recover from, this spring I had to shut my doors and go to work for someone else. I did not realize how important it was to backup my data. I never thought it could have to me.”

This poor guy is not alone. A 2004 study by DTI/PriceWaterhouseCoopers revealed that 7 out of 10 businesses that experience major data loss go out of business within one year.

Here’s another one that is absolutely heart breaking:

“My life is reeling and it may be permanently changed because of lost data. About two weeks ago, my family was out of town visiting my mother and father for a couple of days. We returned to discover our home had been robbed — computer and all. Of course, we had files that we’ll never be able to replace — pictures of our kids, tax returns, work documents, etc. — things that are pretty typical. But here’s where my case takes a turn for the worst. I was laid off from my job last February and have been searching desperately for new employment ever since. My entire professional life, I have worked as a news reporter or a communications director. Along with my resume, I stored virtually every sample of my work on my computer — the one that was stolen. These samples were the only copies that existed anywhere. I had received many awards for this work, and now it’s gone for good. It’s as if I have absolutely nothing to show for a 15-year career. Now an already disheartening job hunt has been dealt a haymaker and sent back to square one. I’m not sure if I’ll be able to recover from this, and it’s all because of lost data. Without a doubt, I’ve learned my lesson about backing up and saving EVERYTHING that’s the least bit important to me and my family.”

How much would it have cost for these two people to avoid these disasters? $50 a year. That’s what it costs to buy a year of unlimited online backup from my company, Carbonite, and several other companies that have good services. How do they work? You download and install a little program on your PC that works quietly in the background, much like your anti-virus software. Any time you write a new file to your computer, it gets encrypted and transmitted over the internet to a secure data center. If anything happens to your PC, you can easily get everything back. People don’t realize how simple it has become and how ridiculously inexpensive.

Here’s one more for you: Two weeks ago the New York Times reported that movie director Francis Ford Coppola had a break-in and the thieves stole his computer and the external hard drive that he had been using for backup. He lost 15 years of photos and writing. I’ve heard that he’s offering $100,000 reward for its return. That would buy 2,000 years of online backup service.

David Friend is the CEO and co-founder of Carbonite. Carbonite is a leading provider of online backup services. Carbonite offers unlimited automatic backup for $50 per year. David can be reached at david.friend@carbonite.com.