4 Reasons Why entrepreneurs should not put all Eggs in One Basket


entrepreneurs

Do you think that running a business on particular niches a good idea? For many owners, especially those who run a new startup, have to choose one topic. It is advisable by the many business experts too, but here we come up with the concept that proves it is partially correct.

Why?

We cannot provide the answer in the single line, but we have discussed a detailed analysis and provide top reasons, why the owner should not put all eggs in one basket. If you are running a startup with good revenue, then you must give a read. Without making any delay, let’s begin.

First, let’s understand what does the sentence “put all eggs in one basket” means.

What Is The Meaning Of Putting All Eggs In One Basket?

Here, the word egg denotes the products or services, and the basket represents an audience. Now, when a basket fell, and if it equipped with eggs, then all eggs may get break down, right? This scenario represents the condition of your business.

For example,

You run a firm that generates a particular product or a fixed audience. Now if the audience moves to some other products that stand for falling the basket, then your product will have no buyers to purchase.

This contradicts the statement that one should initiate the firm with fixed stuff, but we cannot agree to this more. Though for new startups, it is challenging to spread wings on different places, and it becomes more challenging, when they direct business with borrowing options, like cash loans to your door for unemployed people, or relying more on investors.

Now, let’s move to the reasons why should not put all egg in one basket when the revenue gets start increases. 

1. Utmost Reasons To Not Invest In A Particular Place

Here, we have covered the top four reasons, which are sufficient to prove why we should not opt for such type of methods.

Introduce a large risk of loss

We have mentioned in the above example, how it calls the risk. In this method, you have to perform different task, and run ads or offer to stay connected with the existing buyers. One must opt it for only reasons that they don’t want to lose the current audience because the company entirely rely on them for the revenue.

So, performing such a thing can make you more dependent, and feel struck whenever you will run the new idea. The cause is that you always have the sense to lose them if the alteration in the product does not suit the customer. It may take seconds to switch from one firm to another.

2. Cut Down The Opportunity 

If you want to grow business, then you may find it an arduous work. Why? Because you are not free to make a choice, you have to take pole from the customers that do they want to bear the change. They may refuse the changes.

Now, it might occur that plan is right in your point of you, but may not meet EXISTING customer’s choices. Eventually, you have to give up the idea that is nothing but killing an opportunity to move ahead from one state to another.

3. Relying More On A Fixed Customer Base 

It is the most negative impact of this concept over the business. Now, imagine, if you have invested money over a different place or you can say a passive income, then how easily you can make a choice. The source of confidence is that you are strong enough to bear the cost of the plan gets unsuccessful.

Do you know many large businesses run their services at different levels? It may happen that the work they are doing for passive income may not meet the existing expertise. But, they perform this because to support the firm during the losses or negative profit.

4. Can’t Invest More Due To Buyer’s Limitation

Investment is a necessary part of the businesses because, without it, you cannot move from one to another level. Now, the question arises when you are relying on the rigid base. Then you have to work according to their preferences.

You must know what they like, and what type of products they are willing to purchase every time. Here you have to very precise about the data. If you somehow, you fail to meet the expectation, then you may lose the big buyers base, and that could drastically affect the firm’s growth.

For example,

Suppose you bring changes to your products, which are directly encouraging you to increase the prices at which customer purchased. But, now you boost the price in the hope that people will love the quality of the existing services. Now, scenario turns into some other things; it may happen that customer is not want to purchase the product anymore because they do are not capable of bearing such a high cost.

It will lead you to nothing, but the firm may lose a reasonable amount, your existing customer base may switch to another company that offers a similar product at a lower price.

These are the four reasons that show how you limit the occasion to grow. Please choose a different place to invest, this similar method we generally use in our household income. The more passive income, the more you can feel stable and can make your own decisions.


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