How to decrease your dependence on that one big client (without losing them!)
Like any dependency, first you have to acknowledge the dependence. That one big client may account for a massive proportion of your profit.
What does it look like, that one big client?
On the plus side:
- Large, regular billings
- Large cash inflows
- Business that everyone wants to work on
- A source of pride across your company that you have XYZ as a client
But also, perhaps, some negatives:
- Low profitability
- When they say “jump” you all jump
- You have to work long, anti-social hours to keep them happy
- Lack of variety across your business
Good or bad, probably bits of both, that one big client is a risk.
What if you lose them?
What if they lose you?
And it’s also an opportunity.
That one big client may be many things. In fact the only thing that one big client must not be is “that one big client”.
Tubular Bells to Tubular Belle
One of the first records released on the Virgin label was Tubular Bells. It was outstandingly successful and made huge amounts of money for Virgin.
It was a springboard for the growth of not just the record label but the entire Virgin empire.
Indeed, the significance was acknowledged by Virgin Atlantic in naming one of their aircraft Tubular Belle in 1994.
It seems to me that this is one of the best ways to utilise that one big client – use it as a foundation to grow your business and other businesses.
- Use the cashflows to invest in marketing
- Use the fact that they are your client to attract the interest of other clients
- Get testimonials from them
- Build up unique market intelligence that no one else has
- Learn how to profitably service a client of their size
The best way to decrease your dependence on that one big client is to build up a portfolio of other big clients!
If that one big client ticks lots of positive boxes (profit, cashflow, good to work with) then use it as a springboard to grow.
But what if that one big client is a problem?
- Low profitability
- Slow payer
- Demands too much attention from senior people
In this case you still need to be building up other clients to reduce the dependency and, when the time is right, try to renegotiate a better deal with that one big client.
However, you have to be prepared to say goodbye. Ideally at a time of your choosing.
After all, they can say goodbye to you, so wouldn’t you prefer to do it on your terms?
Many businesses are launched or achieve massive growth on the back of that one big client. But many get painted into a corner as well.
There’s nothing wrong with having that one big client – but make sure you make the best of the opportunity it presents.