Ask Yourself—How Secure is Your Business?

Balancing risk and security is the challenge of any business owner. We do not want to be so focused on keeping things stable that we avoid taking the risks necessary to actually grow a business. But, at the same time, we can’t be jumping and leaping about with such abandon that we put our livelihood at risk…

So, what constitutes security? Well, one business-owner’s security is going to be different from another’s. Having a cushion of savings, knowing how and where your customer base will grow, having a steady relationship with your suppliers—these are all some of the ways that a business can build security. For me, I feel more secure once all the contracts are signed and updated—that way I know I have at least some guarantee (although there is never a complete guarantee) that I have work and payment lined up.

We can get into trouble if we expect security too early on in our businesses. Those first few months or years can be pretty hand-to-mouth. It helps to have ways other than income to define security—building a strong, solid, secure base for our business can mean building security into different areas of our business and not just focusing on how much money we are making. That way, the business operations can continue even when income dips (and what, if not security, is that?)

Evaluate how restricted your business is—the more restrictions tend to signify less security. If your business is totally dependent on a specific location, or one major customer or client—you could be devastated very easily. The more flexible and diverse your operations are, the more secure your home business will be. Being able to adjust your income stream or find new suppliers, adjust your services, etc. when the need arises will make your business more secure (it seems to be a paradox but it really isn’t!)

Also: Expect Business Cycles

Do You Need a New Product or Service–Or Just New Customers?