It was a Friday afternoon. My phone started ringing. As I looked down, I saw it was one of our biggest clients calling.
I answered to hear the words anyone in service business dreads, "We're going to be ending our engagement with you guys." In this case, our past client had run out of funding. Like that we lost 35 percent of our expected revenue.
Once I hung up the phone, I did the math and realized we'd have 60 days before we'd have serious cash-flow issues.
I was scared, in the corner with my back against the wall. I had two choices in front of me: (i) let this news break us and our business or (ii) put our fists up and start swinging out of the corner.
I let the news sit over the weekend before telling my team on Monday. I didn't want them worrying when they couldn't contribute to solving the problem until then.
Good news is easy to talk about with your team. The bad news is a whole other ball game.
I walked in, called a team meeting and told them we'd lost a major account and had 60 days to replace the income. One of my team members internalized the news, leaned in and said, "Is that it?" I replied with a, "Yep, any questions for me?" to which this team member said, "What the hell are we doing standing around, let's get to work."
That was the last we spoke of it.
It was on.
Over the next 60 days, we replaced our revenue and then some. Below are some of the lessons I learned from this time on coping with business loss and persevering through them.
1. Double-down on your existing customers
The easiest customer to acquire is the one already paying you. We went through our existing client book and looked for any services we could offer clients that they didn't currently have. This immediately upped our revenue 10 percent and is an exercise we now do every quarter.
In times of despair, it will force you to work on the business as a whole, finding new ways to increase sales you may have never thought of before.
2. Put in serious effort
I'm all for work-life balance when things are good. When everything is on the line balance will have to take a backseat to making sure your business survives. In what some CEOs call, "wartime," every dollar counts and every hour counts. We knew we had 60 days and we couldn't afford to waste any of the time on tasks that took us away from our mission to replace the revenue.
3. Don't set yourself up for the same thing to happen
I had never heard of, "client saturation," before this time. Trust me when I tell you I know what it means now.
Your business should never be dependent solely on another business' decisions. It's tempting to take on big clients, but when those big clients take up more than 20 percent of your total sales you're setting yourself for client saturation. Ultimately being held to the performance and decisions of your client.
To avoid this, we didn't aim to replace our 35 percent revenue client with another its size, but rather several smaller clients that would add up to this number. This way we were protecting ourselves if one of these clients leaves in the future.
It's a lot easier to deal with losing a client who's 3.5 percent of your total revenue over a client that is 35 percent. One is replaceable the other can put your business under.
4. Winning teams see setbacks as temporary
When you're broke (or on the verge of) it's amazing how much of a fire it lights under you and your team. Some people will have the inclination to fold like a $3 tent, however, when you hire effectively and communicate your business situation with your team it's amazing what can get accomplished.
If your team feels empowered they will develop a sense of ownership. And not just a sense of ownership when things are great but when things are tough too.
The people who ride out the storm with you will not only be there when the sun rises again, they'll help you get there.