Why Landing That Big Client Can Lead To Disaster

Why Landing That Big Client Can Lead To Disaster


I couldn’t wait for my monthly catch-up session with my mentor, so that I could break the exciting news to him about the substantial deal I had recently signed. I entered the restaurant, beaming with enthusiasm and excitement at having landed my biggest client ever! I launched into the story about the deal, even before I’d sat down at the table.

He listened intently and then asked, “What are you going to do when you lose this client?” My elation deflated instantly. His response to my news wasn’t terribly encouraging, considering the fact that I had only just landed this client.

Related: Raizcorp: Allon Raiz

I put my hand up to order a bottle of Tattinger Champagne for us to toast to my newfound success, but at the last minute decided against it. I’d learnt my lesson before when I’d celebrated prematurely.

The trap of servicing one client

An issue I’ve often witnessed with entrepreneurs, particularly young and inexperienced ones (and I was one of them), is that they fall into the trap of operating like an outsourced department for a single client, and spend all of their time servicing and delivering to this one client.

As a result of this, the new client ends up becoming all-consuming and all-controlling of the entrepreneur’s time, thoughts, and resources.

Two things subsequently occur when the entrepreneur focuses solely on servicing one client:

  1. The entrepreneur takes their foot off the sales pedal, and they stop looking for new potential clients.
  2. The entrepreneur stops servicing their other clients to the same extent as before.

The danger of having an all-consuming client

At some point in the future, through no fault of your own, a new person may be employed in a decision-making position by the client you are servicing, and this person may decide to change things and terminate your contract – and it’s not a matter of if, it’s a matter of when.

By servicing one dominant client, you increase your risk exponentially because all of your eggs are in (the clichéd) one basket, and your options decrease because you don’t have the time or the mindset to search for other clients.

Your function as the leader of your start-up is to always make sure you increase your options and decrease risks associated with your business – especially when one big client is clearly decreasing your options and increasing your risk.

If you or your current team are unable to cope with the workload associated with landing new clients, start looking for extra resources now, either contract or permanent, who could increase capacity.

Related: Why Opportunity Cost Needn’t Be A Problem

Be obsessive about reducing your reliance

Your rule of thumb should be the following: No client should ever represent more than 20% of your income. Become obsessive about reducing your reliance on one big client, and if you have to increase capacity in order to do so, do it. Review your client list now, and ask yourself the following: What will I do if I lose my biggest client?

Your shift questions

The secret to shifting your mindset and therefore your business is asking yourself these questions, and answering them honestly:

  1. Is my new client all-consuming and all-controlling?
  2. Have I taken my foot off the sales pedal?
  3. Have I stopped servicing my other clients to the same extent as before?
Allon Raiz
Allon Raiz is the CEO of Raizcorp, the only privately-owned small business ‘prosperator’ in Allon Raiz is the CEO of Raizcorp. In 2008, Raiz was selected as a Young Global Leader by the World Economic Forum, and in 2011 he was appointed for the first time as a member of the Global Agenda Council on Fostering Entrepreneurship. Following a series of entrepreneurship master classes delivered at Oxford University in April 2014, Raiz has been recognised as the Entrepreneur-in-Residence at the University of Oxford’s Saïd Business School. Follow Allon on Twitter.