With the harbingers of recession multiplying, now is the time to be watching your customer mix, lest you get caught with too many eggs in too few baskets when the economy finally heads south. Of course, some parts of the economy are already there, and the companies emerging as survivors are the ones that have taken care to keep their eggs well spread out.
In Houston, for example, graphic design firms are dropping like flies, but Creel Morrell Inc. (#341 on the 1985 INC. 500) continues to grow, with annual revenues expected to reach $4 million by the end of this year, up from $1.6 million in fiscal '84. "The only [graphic design companies] staying afloat are those with work in other places," says president and chief executive officer Wesley Creel, who has opened offices in Austin, Tex.; San Francisco; and Los Angeles, and who will soon be setting up shop in Washington, D.C.
To guard against future slumps, Creel continually tracks the firm's client mix by computer, breaking down the current customer list by industry and by geographical area, and noting the percentage of the firm's overall sales represented by each large client. As cautionary measures, Creel Morrell has also raised its retainers for first-time clients (from 20% to 25% of the anticipated billing), stepped up its credit-checking procedures, and -- on certain jobs -- begun to demand 50% of its fee up front.
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