“When people succeed, they tend to party. When people fail, they tend to ponder.” — Tony Robbins
In 1998 I left my 8-6 job as an IT project manager to become an Independent Contractor (IC).
I quickly learned that cash flow management is a critical skill!
As an IC I also learned the importance of diversifying – having more than one client for whom you work regularly, rather than have one or two “big fish” clients.
In retrospect that seems so perfectly obvious, but it was a lesson I had to be taught more than once before I learned it thoroughly.
A bit later I’ll give examples from personal experience (mine & others’) to illustrate this.
In 80/20 terms, if 80% of your revenue comes from 20% of your clients, and if you only have 5 clients, then one of your clients is likely the source of 80% of your revenue. If that client suddenly goes away, so does 80% of your income.
I know this probably sounds like “well, duh, any idiot could figure this out”, but it’s amazing how the simplest, most fundamental things can escape your attention when you’re scrambling around 60 – 80 – 100 hours a week trying to get an IC business off the ground and keep it afloat and pay the bills.
It’s even harder to pay attention to a fact like that when the revenue is flowing in plentifully and bountifully and consistently. Success = Party.
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