Questions for a new entrepreneur: Alignment

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Is your client portfolio aligned to the size of your business?

Do you look after your small clients like you do big clients?

Small businesses always aspire to get one or two big clients. Getting big clients means we get more revenue. There is nothing wrong with aiming high.

Startup entrepreneurs always aspire to get that one big fish, because we assume that if we catch a big fish, it will make us a big fish service provider.

Big companies are in most instance not structured to do business with small businesses.

Big companies can ask another big company to 60 to 90 days payments terms and that will be okay for both of them, but it a small business cannot operate its cash flow on a 90 day payment terms.

Big companies can place an order of millions of items without paying a deposit and another big company will be able to deliver, because they have capacity and reserves to absorb executing the order without paying a deposit, but a small business cannot executive that order without a deposit being paid first.

One mistake I made when I started out in consulting was when I secured a big client with a huge juicy contract, I let go of small clients because I felt it is important to focus all my energies to one client with a big juicy deal.

After completing the project, this big juicy client took about 6 months to pay me, which meant that I had not cash flow for 6 months. All my staff members left me, my suppliers stopped doing business with me, my credit card was maxed out. By the time the juicy payment finally came, it bounced once in my account and it was gone to pay long outstanding debts, by that time my credit name was messed up.

I had to start over again. This was a painful but important lesson that big companies and government contracts are attractive but they are not necessarily what keeps you in business.

Small clients they keep you in business, big clients makes you rich and pay for your bonus.

Never underestimate your small clients. Look after them with the idea of growing with them.

A big client may unintentionally bankrupt you because they are not designed to deal with small service providers.

A big fish can sink your small boat.

Look after your small clients, they will look after you. As they grow, you grow with them.

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About Roche Mamabolo

Entrepreneur, Author, Dad. Passionate about Innovation and Creativity, Books, Poetry, Traveling, Theatre, Art, Music.
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