All Your Eggs in One Basket
In the early days of the business I had one client. One huge client called Sasol. They had thousands of PC’s. At one stage I had more than 20 technicians working permanently for them on-site.
Then government regulations changed and my company did not comply with their sub-contracting criteria. Sasol did offer to employ all my people, but the fact of the matter was that I lost a huge amount of recurring revenue. Turnover went from $70 000.00 per month to $2 000.00.
Deidre` (my lovely wife) and I had a holiday booked to Mauritius which we hurriedly had to cancel. The second month after the contract was cancelled with Sasol, I realized that I was not going to make payroll. A client had paid me by cheque but I needed seven days for it to clear in my bank account.
So I asked Deidre` if she would mind visiting her folks for the weekend as I “had to work”. I dropped her off at her parents and told her that I would pick her up on the following Tuesday. Then I got my “Business Rescue Mission” plan rolling.
I had bought a pool car for the business. We managed to pay it off fairly quickly, and I then gave it to Deidre`. It was her first car ever. It was technically still registered on the business’ name, but it became “her car”. She treated it like a baby. I wasn’t allowed to touch the thing, never mind drive it. I have never seen a car so spotless and clean. She would book the car in for its service a thousand kilometers before it was due and she wouldn’t allow kids or animals in the car because they would spoil the interior.
I took Deidre`s car to the local second hand car dealership. I asked the owner if he would buy the car from me for the weekend. In return I would buy the car back the following Monday. For this “favor” I would pay him $400 more than the price I sold it to him for.
It worked out great. He paid me a nice lump sum for the car, I signed a document transferring ownership of the vehicle to his dealership and I managed to pay my staff by Sunday evening.
Unfortunately, when I got back to him on Monday, someone had already bought the car! And they were offering him $2 000.00 more than I sold it for. So, he expected me to pay him the original price plus $2 000.00 or he would sell the car to the highest bidder. During my negotiation efforts I received a couple of missed calls from Deidre but ignored them because I didn’t know how I was going to explain this conundrum to her.
To compound issues, when I arrived home, Deidre` was on the phone with the police. Deidre` returned home on Monday to surprise me, or maybe she suspected that something fishy was going on.
When she saw the garage door open and no car inside (I was never allowed to drive it), she notified the police that it was stolen (which it was, technically). I had quite a bit of explaining to do. I was banned to the couch for a week and she only started talking to me again after the 12th bunch of roses.
Today she drives a nice fancy four-wheel drive and she keeps the keys hidden from me. Whenever I jump into a new business venture I am reminded by her of how I “stole” her car from her and that I should consider my decisions before acting on them.
The moral of the story is this: never have all your eggs in one basket. Never have just one high paying client, or even a few. You need to sign up as many recurring contract clients as possible to minimize your risk. And, to avoid having to sell your wife’s car. Which technically it wasn’t because it was registered in the business’ name.
(This is Deidre` - I’ve edited this section without that thief knowing. It was my car!)
