Too Many Eggs

Everyone knows the axiom about the risk of having too much business with too few customers.   And most of us try to avoid it.   Even the few companies who are greatly imbalanced know this and have plans to fix it. 

Most often, they never really fix this problem and it never really becomes an issue. 

Recently I worked with a firm that had most of their business with one customer.  Well, that customer stopped ordering and this year the business is down 60%.  

Now picture this; nine months ago they had a healthy business with very nice profits.    Now the CEO is liquidating his retirement savings to keep the business afloat.   I won’t share the numbers, but trust me, it would make you cringe just like it did for me.   And the bank is definitely having cramps dealing with this situation.

As we come out of this recession, many companies can’t figure out how to build their specialty business.  There will be opportunities to take on Big-Box orders to keep things afloat.    It can work but it’s a deal with the devil and should only be used to fund a healthy, organic turnaround.

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