What Is Customer Concentration Risk and When Does One Client Become Too Important?
5 key takeaways Summary Customer concentration risk is the exposure a business carries when a disproportionate share of its revenue depends on one client, or a small group of connected clients. It matters for three reasons. It threatens cashflow if that client reduces spend or leaves. It quietly shifts negotiating power to the client while […]
Why Can a Good Business Decision Produce a Bad Short-Term Result?
5 Key Takeaways Summary A good business decision can still produce a bad short-term result because outcomes depend on more than the quality of the thinking behind them. Timing, market response and information that only becomes available afterwards all play a part. To judge whether a difficult decision was still the right one, look at […]
What Is Opportunity Cost in Business and Why Does It Matter for SME Decisions?
5 Key Takeaways Summary Opportunity cost is the value of the best alternative a business gives up when it commits resources to one choice. For most SMEs, the resources that matter most are the owner’s time, cash and team capacity, and all three are limited. Because opportunity cost is invisible in the accounts, it’s easy […]
What Are Leading and Lagging Indicators and Which Should an SME Track?
5 key takeaways Summary Leading indicators measure the drivers of future performance. Lagging indicators measure results that have already happened. An SME needs both. Lagging indicators show whether the business achieved what it set out to achieve. Leading indicators show whether it is on course, and give you time to adjust while the outcome can […]
