SPREAD THE WEALTH
Helaine Olen is a veteran personal
fnance journalist, the author
of Pound Foolish: Exposing the
Dark Side of the Personal Finance
Industry, and the co-author of The
Index Card: Why Personal Finance
Doesn’t Have to Be Complicated.
It’s easy to let yourself rely on
big, lucrative clients. But what
happens if they ditch you?
Losing a major client is a precarious moment
for any small company. It’s a particular risk if your
business sells to other businesses, because it’s
more likely that a few clients could account for
a signifcant portion of your revenue.
Ideally, you should never rely on any one or
two customers for a majority of your sales, but it
happens all the time. According to David Mitrof,
the chief executive ofcer of Piedmont Avenue
Consulting, industries such as construction and
large-scale catering are particularly prone to an
overreliance on a few big customers.
“There’s always a huge temptation to chase
Fortune 500 companies, but it leaves you vulnerable if you let yourself be dominated by them,”
says Anne Miner, the founder of the Dunvegan
Group, a marketing research consultancy.
If that sounds familiar, realize that there’s
only so much you can do to protect those relation-
ships. Another business’s needs might change, it
might experience money woes, or it might close its
doors entirely. Or, adds Mitrof, “there are times
when an existing client no longer feels the need to
work together. This is organic and a part of the
process of any expanding business.”
So even if your customer relationships are
strong right now, you should regularly game out
your strategy for a business breakup. “Make a
plan,” says Miner. “Know what action you’ll take
immediately, and by regular milestones thereafter.”
If the worst happens, try to stay both realistic and positive, no matter how dire things look.
When Miner lost a contract worth seven fgures annually with barely a month’s notice,
she had to lay of the majority of her staf. But then she turned around and started pitching,
including to former accounts. “I didn’t say I was devastated. I said we ‘had capacity,’” she
explains. “You need to keep yourself together.” Within six months, she signed up a big new
customer and was able to hire back some of her team.
Still, it can easily take three to six months to bring in new business, and longer for big
clients. While you may be currently operating at capacity, don’t completely neglect your sales
pipeline. As Faulkner has realized, “business development is a slow process. It doesn’t
happen on your timing.”
Since losing her bank client, Faulkner has recovered a big chunk of her lost revenue. She
recently acquired a new customer: Stamford, Connecticut–based fragrance company PDC
Brands. This time, she says, “I’ve learned to keep things much more in balance. You can’t treat
one client like the big kahuna. You have to treat all your clients like the big kahuna.”
WHEN KRISTI FAULKNER co-founded marketing frm Womenkind, she soon landed a well-known global bank as a client. Over the next seven years, Faulkner’s New York City business worked with the fnancial services giant on female- friendly marketing, content,
And then one day, it all came to an end. The megabank decided
to consolidate all of its accounts with one agency—not Faulkner’s
specialist frm. Almost overnight, Womenkind lost half its business.
“When you are small and you lose something big, it’s hard,”
Faulkner says, adding that the recovery process was “devastating”:
She had to let go of several employees to reduce costs. A year later,
Womenkind is back on its feet, but its founder is still shaken. “It
was almost like we had to become a startup again,” Faulkner says.
MONEY 70 - INC. - MARCH 2017