For small businesses, this becomes even more important because for many of us in the early years, that whale account might actually be our entire business.
So what do you do when your new business reality is that your biggest account is gone?
It happened to me a year ago. I lost my biggest client. They were acquired. Now there were new leaders and a complicated, highly political integration process. My relationships were gone, and the client work simply came to an end.
So how did my business survive?
In simple terms, I had been planning for this day since I had opened the doors of my business eight years ago.
You could argue that I created a self-fulfilling prophecy by planning for the demise of my biggest client, but that obsessive planning might have been exactly what saved the business when the unexpected trigger event of the acquisition occurred.
Since day 1 of year 1 in business, at the end of every fiscal year I asked myself the following three vital questions:
- What does my business look like without my biggest client?
- Is my business sustainable if my biggest client goes away tomorrow?
- What are my contingency plans?
I was constantly scenario planning and modeling as if the worst news had already come. Because of it, I worked on the following things each year to position myself for success with or without the whale:
Eliminating single points of business failure
During my company's first year, my whale account represented 98% of overall revenue. By year four, it was under 50% where it hovered for the remaining years before it went away.
With constant focus, I significantly grew overall company revenues while cutting my dependency on the whale in half.
50% was still a high number, but it was workable.
Looking at my business through a smaller lens
I then began to focus on what the business looked like with only 50% of overall revenue. For business planning purposes, I literally removed the whale account from the equation and calculated my strategies as though it didn't exist.
As my biggest client, I still gave it all of the love it needed. At the same time, I had to think about my business without it to help me see if I really had a business.
I learned that I did indeed have a business without the whale. It just required continued cultivation.
Managing expenses as though the company had 25% less revenue
Once I started thinking about my business as though my whale didn't exist, I started thinking about reducing the expenses. It wasn't Draconian. I didn't have an urgent revenue shortfall because I still had the whale.
It was a pro-active move to position me to seamlessly transition to smaller revenues, if the day came for it, without a massive hiccup.
Developing a buffer fund
The buffer fund served one critical purpose. It kept me from feeling desperate.
In my industry, the business development cycle is long because it is highly relationship based. The buffer fund allowed me to keep doing business development the way I felt comfortable doing it without adding unnecessary time pressures that happen with unexpected revenue shortfalls.
Never de-prioritizing relationship management
Some people say that you should always be selling. I was coached early on that you should always be focusing on your relationships.
Those relationships paid off. Even though my biggest client came to an end, my business relationships with many of the leaders from that client did not come to an end. When they went to other companies, business developed from it.
Even with all of that, I can't say that my business boomed the year after this happened.
Overall revenues were down, but the company survived with better than expected earnings. Without the buffer fund, expense planning, tireless relationship management, and constant work to reduce dependency on single points of failure, it might have signaled the end.
In some ways, it was the year of my business that I was most proud of despite the lower revenues.
When the worst news hits your business, the new goals are to re-tool and still be standing in the end. If you ask the right questions and put in the right measures well before any trigger event hits, you can find your way to the other side.