Don’t Put All Your Eggs in One Basket: Diversify your investments or client base to reduce risk. For example, a business that depends too heavily on one large client risks significant loss if that client leaves.
Here are three examples of Don’t Put All Your Eggs in One Basket:
- Supplier Diversification: A manufacturing company sources raw materials from multiple suppliers rather than relying on a single provider. This way, if one supplier experiences delays or price increases, the company can still maintain production without major disruption.
- Market Expansion: A small business that originally relied on local customers expands its online presence to reach a national or global audience. This diversification helps the business avoid being overly dependent on local market conditions or seasonal fluctuations.
- Investment Portfolio: An entrepreneur with significant profits from their business decides to invest in multiple asset classes, such as stocks, real estate, and bonds, instead of just reinvesting all profits back into the business. This diversification spreads risk, ensuring they have multiple sources of income in case one investment underperforms.
