Read the Business Pages

What do sub-prime mortgages, debt-backed equity derivatives, and growing credit card debt have to do with writing? Nothing, if you don't cover financial matters. But they have everything to do with a writing business. You not only have to crank out words, but you need to properly plan your business, understand where you should be steering it, what external blockades their are to your progress, and what pitfalls lie ahead. Of course that means studying markets and particular publications, but it also means understanding the business climate.

The global economy affects clients of all sorts. Publications depend on ad revenue. Corporations depend, ultimately, on people buying something. People depend on having enough spare money to make their purchases. Trip one area up - like a credit crunch hitting consumers and investors while tripping the housing market, which has been artificially inflated and the source of much of the wealth people thought they had but didn't - and the rest may also take a spill.

When you see an impending economic black hole, it's time to consider your potential strategies. If you focus on the financial markets, then you have to ask yourself if your clients are overly involved in these problematic areas, because when they run into a wall, so might your client. If you're not specifically in the financial area, then you should consider the possibility that within six to eight months, there is a good chance that companies may need to reduce their spending. To keep your business humming, that means you need to diversify, not just among different industries, but also among different companies.

If you have a significant portion - 20 percent or more - tied up with a single client, consider backing off a bit and not being so dependent. Generally diversification is a smart risk-management practice, but in times like these, it can keep you from getting crushed. When you spread the risk, you're not in as great a danger of that one big client cutting back on its work flow.

I'm not suggesting that anyone panic, and, obviously, I have no way of knowing what the economy will do exactly. I'm no financial expert, but I do read the business pages, particularly the articles that talk about broad economic trends. I also try to read between the lines and connect information I get from various sources. This is a case where, if I'm wrong, diversification won't hurt. But if I'm right, it could save my bank account. Maybe a little preemptive risk management could do the same for you.