Protecting your business

How often I have seen businesses struggle or fail because they either lost their main customer of a partner left taking customers with him or her. While these situations spell the end to some, others see opportunities to reinvent the businesses and implement new ideas that may have been lingering. They invent new goods or services, discover new markets, improve processes, or create better ways to serve their customers. These owners do not give in or give up. Rather, they reignite the passion that originally drew them to entrepreneurship.

But there are lessons to be learned from business owners who find themselves in these precarious situations:

1. Never rely on one customer for more than 20 – 30% of your business.

2. Avoid relying 100% on one narrow market segment.

3. If going into a partnership, have an attorney help you create a partnership agreement that provides reasonable buy-out provisions and protects the interests of a surviving partner. These provisions should be negotiated and in place before the partnership is finalized.

4. Have all employees sign a non-disclosure/non-compete agreement.

5. Maintain at all times a positive cash-flow and create reserves that can be used to exploit new opportunities.

Will Limkemann
www.siqualtd.com