Once a month I sit on a military transition panel where the audience includes perhaps a dozen or so folks considering following an entrepreneurial path after separating from the armed forces. I often ask them why are they considering going into business rather than “working for the man,” as they say. I get the usual platitudes like “I won’t be my own boss” or “I want to control my own destiny”.
The fact is that these are not good reasons. To help them understand why not, I ask them if anyone owns stock. Everybody’s hands go up. I then ask if they are invested in the stock of only one company. Nobody raises their hand. I ask them why, and they say “diversification.” I then ask them if their job income is diversified or if their job income comes from only one company, and the light bulbs come on.
For me, one of the best reason for taking on the risk of starting a business is to have diversified income sources. If you have a dozen customers and one chooses not to renew your contact for reasons outside your control, you still have eleven more customers. You may have to cut a few expenses until you find a replacement for the customer you lost, but you will still be able to earn an income.
