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Ten Greatest Quick Tips for Building the Dream • 123

Idea 76 - Don't expand too quickly

Your meticulous cash management should stop you from getting into a syndrome
called 'overtrading', where the expansion of your business goes too fast for your
cashflow and people resources. Look, it is very likely that you are in it for the long
haul, so take it easy. Steady growth will get there better than explosive growth if that
threatens the foundations of the business.

Idea 77- Concentrate on what you are good at...

Reputation and word of mouth are the greatest marketing assets you can have. En-
courage this by sticking to your core business. Wide-angled guesses at a new oppor-
tunity just because you have some cash in the bank can be an expensive mistake.
You have a new learning curve to go up, and your competition is likely to be at least
one step ahead. Perhaps the best clue is the old adage whereby it is a good idea to
take an old product into a new market in terms of diversification, or a new product
into an old market. Taking new products into new markets is often a step too far.

Idea 78- ... But don't ignore opportunities to reduce risk

On the other hand, there are some major benefits to diversification. It tends to reduce
risk by makingyou less vulnerable to a market suddenly collapsing or the introduction
of a competitive product that makes life in this particular product market difficult -
temporarily or permanently. Especially under this heading, try not to get over-exposed
to one customer. It takes only a change of personnel, or a move by a competitor, to
damage your business with a single client. The most frequent rule of thumb I have
heard, and used myself, is that no customer should give you more than half of your
turnover two years running. Another is to keep all customers below 33% of your sales
at any time.