2013 hasn’t got off to a great start for many businesses. Jessops has closed, HMV and Blockbuster have gone in to administration and they are just the high profile High St. names. This is sad on so many levels, not just for the staff who lose their jobs, for the customers who lose choice, for the suppliers who will have lost money, for the High St. which will have one more empty property, for the landlord losing more rent and for the government losing revenue.
The domino effect!
The demise of one business always has an impact on other businesses. Suppliers lose money when their customers can’t pay. It’s why it is vital to ensure that you don’t allow a customer more credit that you can afford to lose in the worst case scenario. It is also why it is important to make sure that you spread your risk by not over-committing to one customer at the expense of others.
Winning a big contract isn’t necessarily a good thing!
Over the years I have seen a number of small businesses celebrate winning a big contract to supply a large retailer or other big business. This is fantastic so long as the contract is not won at the expense of other customers. The big boys drive a hard bargain, they tend to pay very slowly, they are usually very demanding in terms of quality and delivery times and they can be fickle dropping you as a supplier with very little notice. Before you go for a big contract in your business make sure that you build in the capacity to service your existing customers and even add more new ones.
Keep the pipeline full.
As the owner of a small business it can be hard to keep marketing when you are busy but it is essential. Over the last year two of my major clients have dropped the programmes I delivered for them and one has been wound up. This hurts but I will survive because I have other customers and other sources of income. It has happened to me before and, if I live long enough, it will no doubt happen again.