It usually begins somewhat casually. You secure a contract to work with a client from Heaven. They are so impressed by your work that they renew the contract or even opt to work with you on a retainer basis.

The client soon becomes 30 percent, then 50 percent, and even up to 80 percent of your business. You are so enamored by the client’s consistency in sending work your way, and you cannot even say “No” to them anymore or create enough time to source for other clients.

Many startups are in this shoe, and it is a dangerous position to be in. this is because if anything goes out of balance – such as a readjusted investment portfolio, a missed schedule, etc. – you could be in trouble.

Why You Shouldn’t Be Overly Dependent on Any One Client

Most business relationships are not built to last, which is a regular thing in the business world. If you are overly dependent on any one client irrespective of your industry or niche, you are just one simple decision away from business disaster. Businesses in fields such as professional services, consulting, contracting, etc., are often susceptible to this problem.

And the thing is that getting over-exposed to one client is not even the only risk here. Most small and medium-sized businesses are generally overexposed to a specific community, one distributor, a single market, or industry. Many companies actually start this way, but it is very wrong to keep toeing that path.

Most businesses do; after all, you are supposed to pick a single niche, run with it and stick to it as long and as much as you can. This is why it has become a widespread problem that you must solve if you want to remain in business, thrive, and grow over the long term.

How to Determine If You Are Overly Dependent On One Client

But is there a particular way you can quickly determine your total dependence on a single client? The truth is that no universal exists for this question. And this is because each industry is different, and customers are unique.

Notwithstanding, you need to arrive at a particular answer for your business. For instance, you may consider your business insecure or in a highly precarious position if you lose a specific customer. And this may cost your entire company up to 20 percent of your total revenue.

Can your business survive such a colossal loss? Most businesses can, especially those forced by economic downturns.

The Client Dominates Your Relationship

If a single customer is responsible for most of the revenue you generate as a business, who dominates this so-called relationship? That’s right; it is the customer.

And because you just ‘can’t afford to lose’ this important customer, you push your employees to use all the available resources to ensure this client is always satisfied, 100 percent.

Acquisition of new clients is thrown on the back burner, and your marketing focus even becomes distorted. This is a surefire way or means of making your employees lose the motivation and ability to work at their chosen pace. And this could have adverse effects on your business in the long term.

The Way Out

You are in business for the long haul, and business is all about thriving, not just surviving. Therefore, if you see your dependency on a client approaching the 20-percent mark, you may have to double – or redouble – your marketing efforts.

Do your best to get more business in the pipeline so that your income doesn’t miss a beat if you end up losing one major client. That includes getting new client acquisition straight off the back burner and onto your ‘To-Do’ list every day of the week.

Conclusion

No one faults starting a business with a single client. But staying overly dependent on that one client may be your downfall if care is not taken.

To avoid this, start doubling or redoubling your marketing efforts. Make sure you make new client acquisition a subject that is continuously discussed and action taken. Don’t be afraid to outsource your business development effort to experienced consultants.

And soon enough, your business will start to thrive and will no longer operate on shaky legs if a customer leaves without warning. Have it at the back of your mind that multiple customers create your independent business. And you will always be on your toes, looking for new customers while ensuring the ones you have are still satisfied.

Janneh K. Wright CEO PRIMUS Business Management

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