Do you rely too heavily on one customer?

It is no news that bail-out money is not trickling down to consumers or even small businesses. What is affecting small businesses is the trickle down of business closures and belt-tightening.

Companies that get hit worst are those that rely too heavily on one or just a few customers. An old Cleveland area stamping plant which sold exclusively to the auto industry has just announced that it is closing.

Any business that relies on a single customer for more than twenty percent of its business needs to assess its risks should sales to that customer disappear. If losing those sales could deal a devastating blow, proactive measures must be taken immediately, measures like increasing marketing and sales activities and increasing operational efficiencies.

If your business relies on one company, or even one industry, for forty-percent or more of your business, you are particularly vulnerable and need to take immediate action to broaden your market. Can your products or services be used by other companies or markets? If so, develop a sound marketing strategy to attract other customers. If not, how can you either modify your goods or services or create new ones that will have broader appeal?

Now is the time to be proactive and aggressive. You can’t wait until you lose your major customer.