I’m here to warn you about the most dangerous number in your business.
No this is not about numerology or some woo-woo nonsense like that.
I’m talking about a number that makes businesses brittle.
That is the number 1.
Does your business have only one source of leads? One major supplier? One major customer? Rely on one type of media? Offer one type of product?
To borrow a computer system term, does your business have “a single point of failure?”.
If so your business is brittle and a small change in circumstances outside of your control could have a devastating effect.
That’s a very tough situation to end up in.
SOME PAST EXAMPLES
Many online businesses were hit hard when Google changed its search engine algorithm. These businesses put all their marketing budget and effort into search engine optimization and literally overnight found themselves with no other source of leads.
Similarly, when Google started to make changes to the types of paid ads it wanted to show, even advertisers who were paying Google enormous amounts of money each month, were hit with the “Google Slap”. That is Google started to charge them four, five, sometimes even ten times as much as they did previously. This change forced the advertiser to stop their campaigns and try to fix the issue or find another source of leads. In the meantime their business virtually stopped.
Fax broadcasting was effectively outlawed in the United States and many businesses who relied on that as a sole source of leads went bust.
BUILD ON A SOLID FOUNDATION
Some wise words of antiquity recommend that we build our house on a rock mass instead of on sand. That way when the storm inevitably comes, our house doesn’t cave in.
The first step is to identify any scenarios where the number 1 can potentially hurt you. Here are some examples:
- What if your largest customer leaves you for a competitor or what if they go bust?
- What if there is a change of government legislation and the product you currently offer gets outlawed?
- What if your main advertising strategy stops working?
- What if your advertising costs rise dramatically?
- What if your currently high search engine rankings disappear or pay per click rates rise sharply?
- What if your biggest supplier raises prices, has a supply shortage or goes out of business?
- What if you rely on email marketing and the government cracks down further on this strategy?
All of these scenarios can and do happen.
If you rely on one of anything, you are leaving yourself in an exposed position – you’re effectively building your house on a sandy foundation. When the storm comes and the floods rise, the house is going to collapse.
Identify and eliminate single points of failure in your business.
That way, if the laws change, if the advertising rates go up, if all of a sudden one specific strategy stops working as well as it used to, your business will be safe.
You’ll be the one with the power because you are not reliant on one of anything.
The late great Jim Rohn had an excellent philosophy on the matter:
“You’ve got to think winter in the summer. It’s just too easy to get faked out when the sky is blue and the clouds are fleecy. You’ve got to prepare for winter because it’s coming, it always does.”
In the meantime even if none of these scenarios’s come to pass, at least you’ll have built a more resilient and valuable business.