Diversify your client base, or else…
Diversifying your client base can mean the difference between exceeding your monthly goals and falling short of your obligations. Whether it’s an up or down economy, you need to make sure that your client base is diversified. Why? You’ve heard the saying “Don’t put all your eggs in one basket”? If the basket falls…all the eggs break and that is exactly what can happen you put all of your stock in one client to continue coming back in order to make payroll and pay your monthly nut. Many businesses have one major client that makes up a large percentage of their monthly sales…the client is their life blood. What happens when that big client is unable to make a payment? The business that relies on them for the majority of their income gets behind on their bills and struggles to meet its other liabilities…creates a debt cycle that can easily spin out of control. Relying so heavily on a single client or product can easily compromise the future of your organization.
Do the math! Take your best client (or two if you really want to test yourself) and take a look at your sales numbers and projections if they simply ceased to exist starting today. How scary is that situation for you? If you could get by with a few minor tweaks, then congratulations…you have created a business that is more resilient than many of your competitors. If the reverse is true, you need to take some steps to protect your business.
Take action!!! No one imagined that the construction, manufacturing, housing, banking and transportation industries would all take a dive at the same time (…and that is nowhere NEAR a complete list). Part of securing your business and personal future is looking for the “what if’s” and knowing what you will do if and when. In order to diversify your client base…you need to have either diversified products or diversified marketing. If you do one thing and do it well, it would serve you well to tweak your product to make it more attractive to other markets. My business is financing equipment for business owners and I have had to change my focus and marketing strategy drastically over the last few years and it has opened a lot of doors for future opportunity for my business and it has helped me grow professionally.
It drives me nuts to hear small business owners say that they are either going to “wait around and see what happens” or they “aren’t doing anything until this economy turns around.” If you aren’t proactively moving your business forward, then you are unwittingly running it into the ground. Is there an opportunity that you have been waiting on and justify the waiting with “the economy” or some other form of risk paralysis? Try a different approach and think about the risk of NOT acting, of NOT diversifying and of NOT being a proactive business owner. What risks are you actually creating for your business and employees by being “risk averse”? Diversify your business and give your organization a better chance at winning. Don’t be at the mercy of a client…Take your time and constantly look for new opportunities. Plan ahead and plan to succeed!
Senior Account Manager, American Capital Group