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Building Redundancy [Entrepreneurship
Posted on January 29, 2019 @ 05:30:00 AM by Paul Meagher

Last friday I purchased a lawn tractor. I already have a lawn tractor so why did I buy another one? Here are some of the reasons:

  1. If one of them fails, I have a backup.
  2. On certain tasks, I can double my productivity (e.g., time to mow in the lawn/garden/vineyard/orchard).
  3. The lawn tractor is not identical to the first so offers additional versatility in performing certain tasks. The second lawn tractor has a smaller deck width (42 inches versus 52 inches) so might be better at maneuvering around lawn/garden obstacles.
  4. Last but not least, I got a good deal on it.

The point of mentioning this is to highlight the fact that there are many reasons to build redundancy into your business. That redundancy can come at a cost, not only the acquisition cost, but also the costs of maintenance and storage. Building redundancy should not be done lightly but it should definitely be a consideration when formulating a business plan that lasts beyond 1 year. Once you start experiencing breakdowns, or how long certain tasks take with one machine, or the limitations of the particular machine you purchased, the need for redundancy becomes more obvious.

Redundancy doesn't stop at just acquiring 2 machines. I buy the cheapest Stihl string trimmers I can buy because I don't want to carry around a heavy machine and these work fine for the intended purpose. When they are worked hard they run out of gas, they run out of trimmer line, and the head will wear out. If you want to keep working when these things happen it is nice to have 2 string trimmers. If you have other workers helping you, then you may have to double up on the machines for them as well, although you can also rationalize the redundacy in terms of allowing for 3 string trimmer operators with 1 backup for all the workers.

When you are engaged in a task that determines how much income you will generate, your main limitation may be that you do not have enough revenue generating machines. For example, if you have lots of berries and you want to make jam for sale, you might run into the limitation that your jam making machine can only produce J units per hour. If you had 2 jam makers, you could potentially make 2 x J units per hour. One mistake a person might make is to assume that if you keep buying jam makers your profits will keep going up accordingly. In my experience a person can only operate so many small scale jam makers at one time (2 is the current limit if you are also canning) so the longer term solution may not be to buy x more of the same units but rather to buy an industrial jam maker with a larger capacity or figure out a DIY solution.

The purpose of this blog is to highlight the importance of building redundancy into your business planning. In this age where we are supposed to be consuming less, promoting the acquisition of more is often not good advice. I am not suggesting that we double up on everything we use in our businesses, but to be judicious and decide which parts of your business would benefit from redundancy and how much. Also, in this age where we are supposed to be as operationally lean as possible it is worth pointing out that there are costs to being too operationally lean if you are ignoring the need for some necessary redundancy.




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