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Hello and welcome to this week's episode of The Australian Small Business Show.

In this episode we unpack single person risk from three angles. On the team side, we talk about what happens when one person holds all the knowledge in your business, prompted by a recent client experience where a well-structured team was still genuinely shaken by one unexpected resignation. We discuss why documenting processes and SOPs properly, rather than letting a team member build their own undocumented system, is the single biggest thing you can do to protect your business, and how much easier that's become with AI tools that can help capture a process as you talk it through.

We then move to client concentration risk, sharing our own experiences of losing a client that made up a significant share of revenue, and why we think 20% of income from any one source is a sensible ceiling to work towards. We talk honestly about how easy it is to let marketing slide once a big, comfortable client comes along, and the flow-on risk of giving one client enough power to push down your prices as well as your time.

Finally we cover supplier risk, particularly relevant right now given how many businesses across industries like construction are going into liquidation. We share an example of a manufacturing client who built a genuine three-tiered supplier strategy, with backup suppliers they maintained real relationships with, not just names on a list, so they were never completely exposed to one supplier's problems.

Across all three, the common thread is control. If someone else, whether that's a team member, a client or a supplier, holds the power in the relationship, your business carries real risk.

Have you been asking yourself, "How reliant is my business on any one person?" This episode gives you a practical starting point for finding out, and for building in the contingencies before you're forced to.

Key Takeaways:

• Document your processes and SOPs properly rather than letting critical knowledge live in one person's head, and use AI tools to make capturing them easier than ever
• Aim to keep any single client below 20% of your revenue, and keep marketing running in the background even when a big client makes it tempting to stop
• Build genuine backup supplier relationships before you need them, not just a name in a drawer you've never actually ordered from
• Watch for situations where a team member, client or supplier holds enough power to start dictating terms, whether that's pricing, timelines or decisions
• Assume loyalty isn't a long-term plan; build a simple contingency matrix so a resignation, a lost client or a supplier collapse doesn't mean panic stations

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Disclaimer: The information shared on The Australian Small Business Show is general in nature and does not constitute professional advice, legal or otherwise. We recommend consulting with your advisors on your specific circumstances.