This is why you should NEVER depend too much on one single client
There was a point in my self employment journey where my business depended HEAVILY on one single client.
This was not desirable, nor was it planned this way.
It just happened like this.
The client was one of our earliest, and one of our highest billing, so naturally, with the natural churn of clients, and with this client staying on, their payments to us became a larger and larger proportion of our earnings over time.
This was problematic, but I had no idea how to fix it.
As usual, things came to a head quite quickly and they took a form I had not expected.
The longtime CEO of the company, whose ear I had and whom I trusted, departed quite quickly to focus on their personal life, and a new CEO was installed, one with, let’s say, to put it kindly, far fewer human qualities.
An anecdote – this new CEO actually instructed me NOT TO GET A DOG, because having a puppy is very time consuming they said, and I will need to dedicate my time to focusing on their business. Thankfully, my stubborn streak had already been well established at that point, and I laughed and ignored them.
In any case, work from this client started slowly drying up, thankfully slow enough that we could pivot and diversify into different areas.
But, the lesson was there, obvious and glaring.
NEVER EVER DEPEND ON ONE CLIENT
There are multiple reasons why the above should basically be a law of doing business, but in my view, these three are the most important ones:
- Depending on one client unbalances your cashflow and earnings. If they decide to withhold payment, you’re stuffed. If they decide you’re not worth your rate, you’re stuffed. If they go under or suddenly fire you, you’re stuffed. I could carry on, but you get the gist.
- Dependence on one client is bad because they will have an outsize influence on your business. I saw this with a fellow agency I collaborated with years ago – they had, by Maltese standards, a massive client, a client so big that the client essentially coloured and shaded and influenced the daily runnings of the agency. The agency ended up, for a while at least, as kinda like an internal agency for the client. I saw this happen, and it was horrible. It is YOUR business, not your clients’, and especially not any one single client’s, so never ever forget this.
- Depending on a single client too heavily means you will need to heavily allocate resources to this client, which stunts your growth in other areas. You will get really good at serving that one client and their particular needs, and likely abandon expansion into other areas that are peripheral or ancillary to that client’s narrow focus of requirements.
