Building a business that can survive a bad month

Every business has bad months. The difference between the ones that survive and the ones that panic is usually not talent or luck. It is runway. Cash in the bank, low fixed costs, and more than one way to bring money in the door.

Runway gives you the ability to think. Without it, every decision becomes an emergency decision, and emergency decisions are almost always expensive ones.

Start by looking at your fixed costs. These are the bills that do not care whether you had a good month. The lower they are, the more flexible your business becomes. Flexibility is a kind of profit.

Then look at revenue concentration. If one client or one channel represents most of your income, you have a vulnerability that has nothing to do with how good you are at the work.

Resilience is built in quiet months, not during the crisis. The best time to strengthen the business is when things are already going well.

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