The Dangers Of ‘Putting All Your Business Eggs In One Basket’

dangersThere’s usually a common theme when a business starts to fail. Maybe they’re neglecting their customers’ happiness or overworking their employees? One of the most common things I’ve run into over the years is a lack of a Plan B. I like to refer to this a ‘putting all your eggs in one basket’. Here’s what I mean.


When a company stumbles upon an idea that they like, they stick with it. As time goes on, they develop it further, and hopefully, they continue to gain success. There’s nothing wrong with this, but not taking the time to develop other areas of the business is detrimental.

There’s a great source about Hampton Creek to use as an example of this. Despite putting huge efforts into their Mayo line, they mention that it’s “less than a third of our sales.” Let’s look into that quote a little more. Despite putting a lot of investment into this area of the company, it’s only a small part of their whole operation. They’ve got other sources of success and income that they rely on because they can’t afford to put all their eggs in one basket.

See what I mean now? While success may generate minimal profits, failure won’t destroy the entire company. If they put all their efforts into their Mayo operation, and it didn’t go as planned, they’d be in huge trouble. Suddenly, their failure would extend to the entire company, potentially putting it in danger. Are you doing this with your company?

The Ripple Effect

When a company relies too much on one idea, they’re putting their entire business at risk. When it fails, it creates a ripple effect across the entire organization. Firstly, management starts to panic at the fact that their only source of income is letting them down. As a result, they’ll either throw money at the problem to try and fix it or look to desperate measures to generate extra cash. This then ripples down to employees, who are often told to work long hours on new projects to sustain the business. When you start putting too much pressure on your employees, their work suffers, and they start to leave.

Now, things are even worse than you ever thought possible. Your employees are unhappy; you’re losing money, and there’s seemingly no way out of the predicament. At this point, you’re left with no choice but to pack up and cut your losses or continue to take big risks. If you’re lucky; you’ll stumble upon the perfect formula. Nine-out-of-ten times, though, it’s too late.

What Can I Do About It?

It’s simple; don’t get complacent with success. Nothing lasts forever, and when one area begins to fail, you need to rely on another to continue generating income. While you don’t want to go over-the-top and take on too much work, you also can’t afford to focus on one specific area. As you company grows, grow with it and seek new opportunities to expand. The moment you start to relax, you’re putting your company in jeopardy.


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