Potatoes are cool. They aren’t hard to grow and people have survived on them for years. They’re the sure thing in the land of stuff-to-eat-so-you-don’t-starve. And they’re pretty hardy fellas – drop one and they may bruise a bit, but they sure don’t splat like an egg would. I like eggs a lot, but they aren’t a sure thing. You could completely miss breakfast if you drop them! Disaster central. But together potatoes and eggs can be a good balance.
Do you understand yet? Yeah, I didn’t think so.
Whenever you watch these financial assistance shows or read books from Dave Ramsey, experts always tell you to have a well-padded nest egg stashed away ‘just in case.’ It’s really hard to be both a bold entrepreneur and have a safety net somewhere. You’re a risk-taker by nature. But do you have a back-up plan?
There was this strange thing that happened in 2008-2009; something called a financial crash. I was working overseas at the time so was quite removed from the whole situation, at least in the beginning. When I returned home I heard tales of people losing their jobs due to cutbacks and not being able to find new ones, families losing homes and having to sell items to survive. But me, I was only officially jobless for about 7 days. I was offered a position at my old company immediately. The CEO was the owner of a start-up company; how did he survive the stock market crash? How was I able to be so lucky?
‘Don’t put all of your eggs in one basket.’ Got it. Always carry two baskets with eggs in them, that way if you trip you are more balanced. You might tip one over, but you still have the other one. I know it’s a pretty annoying saying. But these idioms come from somewhere, from some eloquent person who learned a lesson in a painful way. I’d like to change this saying a bit. That’s great you are spreading the egg love around, but why don’t we throw some potatoes in your basket too? Maybe ‘don’t put all of your potato salad ingredients in one basket.’ Never mind, you’re right; too cumbersome of a phrase to be catchy.
So how did the CEO survive? Multiple companies – he kept his options open. He made sure his revenue stream didn’t all come from the same place. But he learned the hard way. Company #1 had one major client and that client went on a budget freeze during 2008-2009. But company #2 was a real estate company, and it owned the building that company #1 was housed in. Peter & Paul didn’t have to rob each other, they were a team. We might have had our revenue become a frozen lake, but we had a place to operate. A large chunk of our cost was already taken care of. Did he have to layoff some staff – of course. But the company stayed afloat even if we downsized a bit.
He did learn one painful lesson, which was the importance of diversifying your revenue. Otherwise known as – have more than one major client. You may think that’s obvious, but if you have a well-paying customer do you think about pursuing more work with them, or focusing your efforts on expanding your cash portfolio? One tends to go where the easy money is, not the uphill battle route.
So spread the customer love around. Find your backup plan. Make some potato salad.
In your case, maybe it’s an extra savings account or maybe it’s a second business. But there’s a balance between living for today and planning for the future. Figure out how to do both.