As a young entrepreneur it is extremely important to remember that growing at a rapid pace can be the leading downfall to your business. Throughout the past few years I have gained the knowledge to accept the clients that will expand our company for years and years to come not for an easy dollar in my pocket that eventually leaves you out of business.
For instance, I was faced with the decision to accept a very large contract printing account. The account would expand my business by about 30%. I would be forced to invest about $50,000 in machinery upgrades and additions as well as increase my employees by quite a few just to keep up with the volume. By entering this agreement it would have put me in a situation to where my business was dependent on that specific client for 30% of our revenue stream.
While expanding and developing is part of the game I find it very important to protect your future and to not put all your eggs in one basket.
If I had 100 individual clients that together added up to 30% of my volume it would make sense. I am not running too high of a risk at that point if a few drop off here and there.
Next time you are faced with a decision that could change your structured system and overall company future, always ask yourself…
If I enter into this agreement, would I become dependent on the client and allow them to determine the success of my company?
