Too Many Eggs in One Basket — And Other Signs That Point Toward Business Failure
It’s a common practice in business to find a niche and exploit it by focusing 100% on its nuances. Some niches can be incredibly lucrative, especially when you position yourself as an expert in a specific field and build your reputation in a clearly defined market. However, this also presents a significant risk to your organization if (and when — because all products and services have a life cycle) the bottom falls out of a particular market. This is particularly true if you insist in keeping all your eggs in one basket.
Consider the plight of a marketer I recently spent some time with. For many years, he had “owned” a specific niche and enjoyed, in his words, “significant and, to be honest, fairly easy returns.”
This all changed when the industry he supported collapsed, suddenly and without warning. Essentially, all his eggs were in one basket, and when his customers took a tumble, he was left with egg on his face. Clients and money dried up very quickly, and he was forced to make some drastic changes in his business. He openly admitted that he had perhaps had it too easy for too long and, as a result, had become complacent. With 20 years of industry-specific experience behind him, it wasn’t easy to change course.
Remember: In this digital age, no matter what you do, the opportunity to be disrupted by technology is very real.
Five Signs of Success That May Ultimately Lead You Toward Failure
You might think your business is doing OK — but if you recognize any of the following scenarios in your organization, it might be time to invest outside of your comfort zone.
- The Big Client: If you have a client that drives more than 50% of your revenues, you might be on the road to a sudden crash. What would happen if that client suddenly went out of business, was acquired by another organization or took your services in-house? How would you fill the void quickly enough to avoid going under?
- The Big Supplier: Having one big supplier is as risky as having one big client. If your supplier goes out of business, where will you go to keep your clients happy and keep you in business?
- The Wrong Clients: Too many of the wrong clients can have a negative impact on your business because they pull your attention away from more lucrative work. Understanding how to say no to bad business is a vital component of successful business development.
- Deep Niches: If your business is known purely for the work it does in one particular niche, how will you survive if that niche hits turbulence? The smartest organizations look for common ground across multiple niches and develop their products and services to suit the needs of a much wider audience.
- Complacency: Even when things are going well, you cannot afford to be complacent. Dedicate a little time every month to identifying and testing new markets, and you’ll be ready for any unforeseen disasters around the corner. Remember, the most dangerous thing anyone can say in business is “We’ve always done it that way.”
The moral of the story is don’t wait for change to impact your business; embrace it now and be in control of the curve when you hit it.
This post first appeared on the iContact Email Marketing Blog.