… will quickly become your nemesis
By Allon Raiz
I couldn’t wait for my monthly catch-up session with my mentor so that I could break the exciting news to him about the substantial deal I had recently signed. I entered the restaurant beaming with enthusiasm and excitement at having landed my biggest client ever! I launched into the story about the deal even before I’d sat down at the table.
He listened intently and then asked, “What are you going to do when you lose this client?”
My elation deflated instantly. His response to my news wasn’t terribly encouraging, considering the fact that I had only just landed this client.
I put my hand up to order a bottle of champagne for us to toast my newfound success but at the last minute decided against it. I’d learned my lesson before when I’d celebrated prematurely.
The trap of servicing one client
An issue I’ve often witnessed with entrepreneurs (particularly young and inexperienced ones – and I was one of them) is that they fall into the trap of operating like an outsourced department for a single client and spend all of their time servicing and delivering to this one client. As a result of this, the new client ends up becoming all-consuming and all-controlling of the entrepreneur’s time, thoughts and resources.
Two things subsequently occur when the entrepreneur focuses solely on servicing one client:
- The entrepreneur takes their foot off the sales pedal and they stop looking for new potential clients.
- The entrepreneur stops servicing their other clients to the same extent as what they’ve done previously.
The danger of having an all-consuming client
At some point in the future, through no fault of your own, a new person may be employed in a decision-making position by the client you are servicing, and this person may decide to change things up and terminate your contract – and it’s not a matter of if, it’s a matter of when.
By servicing one dominant client, you increase your risk exponentially because all of your eggs are in (the clichéd) one basket and your options decrease because you don’t have the time or the mind-set to search for other clients.
Your function as the leader of your small business, from the very first day that you start, is to always make sure you increase your options and decrease your risks associated with your business – especially when one big client is clearly decreasing your options and increasing your risk.
If you or your current team are unable to cope with the workload associated with landing new clients, start looking for extra resources now – either contract or permanent – who could help increase capacity.
Be obsessive about reducing your reliance
Your rule of thumb should be the following: No client should ever represent more than 20% of your income. Become obsessive about reducing your reliance on one big client and, if you have to increase capacity in order to do so, do it. Review your client list now and ask yourself: What will I do if I lose my biggest client?