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I was talking to a janitor at the gym yesterday. Nice guy, turns out he does a little on-line stock trading on the side, has a regular day job, but does the janitorial stuff on weekends to pick up a little more money. Was once a plant manager somewhere in upstate New York, actually owned a larger janitorial service once with employees and all that. Doesn't make much with the on-line trading, but he likes it, and it's good now and then, and even when it isn't he doesn't lose much.

It's easy to see what this guys problem is. He looks older than he is, and he's just a nice, pleasant person. Any interviewer is going to look at him, think "No fire in the belly, a little too old, next". Nothing special, too many other people to look at, and after a few months of trying after getting laid off from the plant manager job, he probably gave up.

So what about the janitorial business? What happened to that? Oh, well, his biggest customer got bought out and the new company brought in their own cleaners, and the second biggest contract had a son who also wanted to start a cleaning business.. so, here he is. Not really unhappy, not really happy. Kind of muddling along.

And the stocks? His eyes light up. He's having fun with that. He likes researching companies, but says he likes to look at markets more than the company itself. He's made some good moves now and then, knows not to be greedy, knows to take his profits when they are there, doesn't get crazy over "I shoulda" stuff.

He goes back to cleaning, I go back to my workout, but I can't help wondering something. Would he ever take all of his stock money and put it in one company?

Almost certainly not. That's not what day trading is about; as he said, you move in, you move out, you take your profits when the market lets you. Certainly you could be safe enough with some companies: pouring everything you own into IBM is unlikely to be a dumb move over the long term. But it could be, and that's why everyone tells you to buy mutual funds: spread the risk.

How come no one ever tells you that about business?

Tying your business to one or two big customers is just like putting all your investment money into one or two stocks. You may do fine, but you are risking much more than you would with a hundred smaller customers. That's always been my business model and I treat it very seriously: the minute a customer starts needing too much of my time, I go looking for someone to pawn them off on. I don't want customers who need a lot of me.

Oh well. I feel a little sorry for that unwilling janitor and hope that his lot improves - maybe he'll hit some luck with the market or maybe something better will come along for him. He's a nice guy, he deserves it. Or maybe he'll heal his wounds and try striking out on his own again. That would be nice.

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© Anthony Lawrence

Tue Oct 30 14:21:23 2007: 3210   MikeHostetler

I'm sure he didn't mean to have two large customers he was dependent on -- it probably just evolved that way and then both of them cut his company at about the same time. There is something he probably could have done about it, but when you are running a small business, especially a service like janitorial, you don't have a lot of resources to diversify.

The same can be said about independent computer contractors.

I think that's is where it breaks down -- you can't always control where your business is headed (though you can control the outcome) but you can control where your money it put in the stock market. That doesn't "evolve" like a business -- it just grows or shrinks. It doesn't evolve into something totally different. Well, usually. . .

Great post! very thought-provoking.

Tue Oct 30 14:42:18 2007: 3211   TonyLawrence

I think you can control it - you simply refuse big customers, period.

I know it can be hard, especially if you have nothing else right now. But taking that customer prevents you from taking on customers that do come along later..

Some customers are just not worth having.

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