Before you pop the bubbly and celebrate that new big client, ask yourself: is this a blessing or a curse?
Enjoy the pop of a champagne bottle being opened. You just put a leash on your first Big Dog. An international company on the Fortune 1,000 list is now your client. Following the arduous process of becoming an approved vendor, there’s an immediate cash stream. Not bad.
That’s the blessing and curse of the Big Dog, the one client that comprises more than 50 percent of your revenue. Huge success on the front end and the possibility of instant, fatal failure when it all evaporates in the blink of an eye. You’re not a good businessperson if you don’t exploit the Big Dog, but you’ll never be a brilliant businessperson if you don’t mitigate the risk that comes with it.
Ride the wave, but look for the next one.
I’ve been there–as much as 80 percent of our business came from one client several years ago. Clients happily referred us to their colleagues within the same company. We worked hard to diversify our client base so when Big Dog missed a quarter and cost-cutting began with “vendor consolidation,” we weren’t chained to the fence.
Here are your next steps:
1. Exploit your win, inside and out. Spend half your time building new business inside the big client and half your time leveraging the client to win business with other companies. The money you’re winning from the Big Dog needs to be discounted by the risk. And the credibility you’ve earned has got to be leveraged into new prospects.
2. Follow people. Some of your peeps at Big Dog are going to leave to join other companies. This is the best way of diversifying your business. People, not companies, sign you and your company. The respect and credibility you’ve earned persists when those folks join another firm. Your business obligation is to monetize it.
3. Bank your success. Remember that part about the discount on the earnings from Big Dog? Talk to your accountant. A percentage of those earnings must be banked into a “rainy day fund.” Remember Aesop’s fable: Are you an ant or a grasshopper?
4. Divide and Conquer. Use your staff wisely. Assign someone to focus on building business at Big Dog. And someone else to focus on building business outside it. As a business owner, you need to be the one coordinating the effort–but stay out of the picture for a while. You shouldn’t be in the first meeting because there needs to be a second and third meeting.
5. Make hay while the sun shines. Can you get your clients to give you a public endorsement while everything is hunky dory? On LinkedIn? On your website? In a letter of recommendation? It’s a lot easier to get that endorsement before the winds blow in a different direction, the cost reductions start, and the layoffs begin. When that happens, everyone thinks about themselves and generosity evaporates.
Remember that there’s nothing wrong about big cash flow–except the fact that it rarely continues forever. So mitigate the risk of the reward. That Big Dog can keep you warm on a cold night. Just make sure there are a few puppies around, too.