Eggs come in all different sizes but pretty much the same shape. But it doesn’t really matter whether they’re from ostriches or wrens, if they’re all in one basket then you need to watch that basket.
If you’re running a business, no matter how small, you need to manage and minimise risk. You can’t eliminate it completely, of course, as all entrepreneurial activity involves risk.
You can take out insurance, but this will only protect against certain types of risk. Your terms and conditions may be cast iron but they can’t cover all eventualities. One of the biggest risks is not having a broad enough spread of customers.
It’s a tremendously exciting moment when you land your first big client but it’s important not to neglect your other clients as a result. However, it’s almost a given that once you’ve been in business for some time the Pareto Principle will begin to assert itself. The Pareto Principle is more often known as “The 80/20 Rule”, and in this context it usually means that 20 per cent of clients generate 80 per cent of your turnover.
The greatest fear will then be the loss of one of those big clients. Large clients know this, and they may try to take advantage of the fact. How then, do you reduce your exposure to this level of risk?
- Quantify your level of risk. How much is that big client paying you?
- Look after that big client, provide exceptional service, dovetail into their business, and they’ll find it difficult to leave.
- Never stop marketing, and aim to recruit new clients to the value of the big client as soon as possible.
- Do everything right. Pay attention to detail.
- Don’t take your eye off the ball and avoid complacency at all costs. In the words of Emil Gumbel, the German statistician, “It’s impossible that the improbable will never happen.”
But remember, that big client chose you because of what you do. Others will too.