Who do you Depend on?

Strange is it may seem you do not always have to just consider your own companies health but the companies you depend on both up the chain and down the chain. I have seen several excellent companies run into extreme levels of distress due to key suppliers and major customers becoming insolvent forcing the once healthy business to be in a bind they didn't see coming.

If your business is dependent on any business relationship for the continued its well being you owe it to yourself and other stakeholders to take a good look at them. To find out about the companies you are dealing with can be as simple as purchasing a Dunn & Bradstreet credit report. If your business wields significant sway and your company constitutes a large portion of their business you may be in a position to request accounting information and confirm that they are in fact healthy and will be around to continue trading with them.

Keep your business going by continuously monitoring and managing the level of risk your company is exposed to. Where possible always have a contingency plan in place to source supplies elsewhere at short notice. Try diversify your client base and attain letters of credit from them if they are purchasing significant levels of inventory. You can minimise your risk by watching how others are affected.

Take care of your business and it will take care of you.