Diversify or die
Imagine what would happen if your biggest client left you for another vendor.
Would you be OK and simply move on to another client?
Or would you be out of business in less than two months?
You may think, “Hey, my clients are awesome. This will never happen to me.”
Yeah, I used to think that, too.
But here’s the scary thing…
Companies go out of business.
Companies have cash flow problems and slow-pay their vendors.
Your contact could quit or get fired – and your new contact may want to work with someone else.
Companies can (and will) break their retainer agreements with you.
If you don’t have other clients to take up the slack, you will be up a very stinky creek without a paddle.
I’ve seen this happen many times.
One woman worked with a client for over five years. When a new marketing manager came on board and wanted to “change directions,” her firm was fired – and the owner was suddenly scrambling for a full-time job.
Another person had to shut down his business and get a “real job” until he could build things back up again. It took him five years.
This can happen to you too. If you let it.
Here’s how to prevent an irritating situation from turning into one that crashes your business.
- Diversify your client base (or die.) Ever hear that you’re supposed to eat a variety of fruits and vegetables for maximum health? It’s the same with your client base. Rather than relying on just one (or two) main clients, have a number of client gigs going at once – plus, more prospects in the pipeline. That way, it won’t hurt if a client (even a big client) goes away. You can even build out a product or write a book. Those “extras” can mean some stable money.
- Build an emergency account. Freelance writers (and business owners in general) don’t often think about a business emergency account – but it is VERY important. Try to have at least three months’ expenses socked away. If a client flakes out, you’ll know you can still pay your bills. One way you can do this is to transfer a percentage of every sale to a savings account. That way, you’re always feeding your savings account in a low-stress, easy way.
- Always keep selling. Always. Don’t figure that you can sit back and rest on your laurels, because you can’t. I’ve made this mistake before. Take sales calls even if you’re busy. Send out proposals during your “I’m so swamped I can barely move” times. Otherwise, you may wake up one day and realize you have no work to do – and no income coming in.
- Consider any “big money” client extra cash. Don’t rely on it, don’t get used to it and for heaven’s sake – don’t spend all of it. In a perfect world, you bank a considerable part of that cash in your retirement or “just in case” fund.
The more you learn how to protect your business, the more you’ll be ready for those inevitable “lean times” that come your way. Then, you can find the perfect client to replace one that has left – rather than scrambling for whoever you can get.
And that’s a wonderful thing.
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Photo credit: Lola1960