During tough times such as these there are two things that can be devastating to start-ups and fledgling businesses, and that is the loss of a key client or key vendor. In fact in can have enough of an impact that it can then cause the closure of your own business if you do not prepare for and handle it correctly.
True some seasoned businesses can be impacted by the same event, but most effective and seasoned businesses have enough clients that the loss of a single large client can be handled. Though it may have a big impact, the risk is usually spread out among more clients and vendors.
So, how do you remedy this? As for vendors and suppliers, the old adage of “Never put all your eggs in one basket” really holds true here. It is usually easier to find other vendors when you already have one or more in place. Even if you only place minimal orders with the second or even third vendor it is important to have another source for your materials, goods, and even services in some cases.
This will also make it much easier to scale up with a vendor you are already using, and you will have an idea of how they operate. Think of the effort you would have to take to source new or like products or services if you suddenly lost your vendor. Do they make quality products? Can they deliver the amount you need? Can they deliver within your needed time frame? Can you order the amount you want, or do you need to order more or even less?
In fact I know of a big business that used only one company for a particular service that recently went out of business unexpectedly due to the economic conditions after filing bankruptcy. This has the other business scrambling to find a new service provider at the last minute, and they have not had much success.
As I mentioned earlier, having a single or even two or just three clients that you depend on for a majority of your business income can be very scary. Especially in times like these. Also, the loss of a client is much harder to overcome than the loss of a vendor. It directly impacts your income, bottom line, and in some cases even your reputation.
How do you handle something like the loss of a key client? By getting started looking for new clients NOW before the loss occurs. Easier said than done right? Not always, but yes it can be difficult building a new client base or even expanding into additional clients.
What are some effective ways you can do this?
- By asking your current clients for referrals
- Ask your vendors for referrals
- Develop an effective Word of Mouth Marketing campaign
- Develop an effective process for handling new and prospective clients
- Join a Word of Mouth (WOM) referral marketing group like BNI
You will be pleasantly surprised by how asking for referrals from happy clients works.