Not business is an island, out there alone on the sea of the economy. There are systems you’re apart of, businesses with whom you have a mutual understanding and common cause. You’re a small player, no matter how successful you are, in a game much bigger than yourself. Together, the economy is bigger than the sum of its parts. Still, that doesn’t mean you should go too far in the other direction, and neglect to see yourself as a business that stands on its two feet. You should never become too reliant on anything else, be it another company, system, or star player. Here are a few of the pitfalls to watch out for.
That One Customer
Now, we all know how exciting it can be to receive that one big order that pushes you into the next level of business. After toiling away for several years, your hard work is beginning to pay off and you’re finally beginning to post some serious numbers in the profits box of your accounts. Well done! Nothing too bad in that, on paper at least. But you should be wary of putting all your eggs in one basket. If you stop putting in the necessary level of effort for your other smaller projects, or stop going after them altogether, then you’re setting yourself up for a fall. What if your one lucrative client accounts for 30% of your revenue initially, but soon down the line they’re accounting for 50%, and then more? You’ll be in trouble should they decide to pull out and you haven’t got any more clients lined up to replace their orders. No matter how attractive a client is (and some will be: Google? Yes please!), you should never be a subsidiary of them.
Keeping Things Small
Consequently, you should try to keep your contracts small but plentiful, especially in the early days. If you land one big order before you’ve got the systems in place to handle that order and go after new clients, then you’ll be in over your head. You might do that one job really well, which will lead to other clients down the line, but you’ll most likely be limiting yourself too much if you stick to just one. Grow organically, naturally. If a client feels like it’d be too much of a step up then it probably is, and may do you more harm than good in the long run.
It’s not just clients that you can be too reliant on. You can also be too reliant on the systems that allow you to do your job. For example, if there’s a piece of licensed software that becomes indispensable to your business, then what happens if the software company goes out of business and no longer provides the software? If this sounds like it might be a concern, you should solicit software escrow services, which would enable you access to the source code should they go under. Similarly, take another look at where your important documents are. Are they on a hard drive? What would you be able to do if that hard drive failed (and eventually, it will)? You should look at cloud storage. Even then, be careful: some people do wake up to find their cloud storage accounts deleted for some perceived breach of the terms and conditions. It’s best to back up everything, over multiple platforms and devices.
There are too many companies out there who treat Facebook and the rest of the social media big players as one of their only ways of marketing to new people. This is fine for now – social media is a terrific way to get the word out. But never forget that these systems will one day be obsolete. Facebook won’t be here forever, no matter how confident you might think otherwise. You should always be exploring new ways to market your product or service. Keep it diverse: a video here, Facebook post there, a blog and newsletter, and so on. If you build up a strong Facebook following only for your account to be deleted, then you’ll have many other tools to fall back on. Don’t put your success in the hands of just one giant corporation!
That One Genius Employee
Everything we’ve talked about so far has been mostly about external factors. But there are a few internal considerations you should bear in mind too. This applies especially to those companies who are more reliant on one employee delivering the goods than they should. Instead, you should build systems within your company that play to the strengths of your MVP, but which would also be able to manage should he or she depart. Think of it like a sports team. An OK team with a star player may challenge for all the big titles, but the second that star leaves they’ll quickly start sliding down. A great team with a superstar player, meanwhile, will still be great after the player leaves.
Things Staying the Same
Things are going well, the economy is ticking over nicely, the whole country seems to be in a state of perpetual happiness. This echoes back to the boom years of the nineties. And what happened after that? Everything fell apart, and too many businesses were ill equipped to deal with the massive downturn of fortunes. Never, ever take for granted that the way things are now are the way things will be forever. Innovation is happening far too quickly for things to stay the same for any significant period of time. Have plans, be adaptable and open to change, and be quick to react to changes in the atmosphere.
Play the Game
Essentially, running a business is akin to “playing the game”. There are frameworks you have to work within, but there’s still plenty of room for autonomy. The only thing your company should be reliant on is its success; it’s up to you to set it up so that it’s able to achieve this as independently from other factors as possible.by