Sometimes we all get lucky.
For those who missed it, Leamington, my neighbouring town, was in the New York Times the other day.
Leamington got lucky. Leamington didn’t diversify. It had all its tomatoes in one basket and eventually the tomato got squeezed.
Ironically, Heinz buyer, Warren Buffet once said that “Diversification is protection against ignorance. It makes little sense if you know what you’re doing.”
Now, the factory is still running, and the new owner is doing a pretty mean business. And who is their number one client? You guessed it – Heinz!
The Highbury Canco owner says, “now, it’s about securing new products,” but he’s only half right.
He’s right that now is the time diversify the heck out of that factory. Who doesn’t love a good tomato chutney?
But it’s also the time to make sure this doesn’t happen again.
Does 50% or more of your company’s revenue come from a single client? If so, you’re setting yourself up to get juiced.
Let’s be ignorant this time around instead of just getting lucky.