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Effective cash management is often the pitfall of a lot of consulting firms. Avoid committing this mistake by improving your forecasting accuracy and reducing revenue risk. Watch these short tips to find out more.

Having the right revenue mix of clients.

Depending only on one or two big clients is the perfect formula for business failure. Avoid this pitfall by creating a strategy that allows you to nurture a wide range of revenue mix clients. This video will give you tips on how to free yourself of this risk.

Industry research shows us, most small consultancy firms have a large percentage of work in one or two clients. As the firm grows it becomes too risky to just rely on one of those clients, so putting into place a plan of action to spread the risk across a number of clients makes sense. Most companies know the total revenue number they had for their sales last year, but not the breakdown of what that client makes % wise, so maybe you should look into your past few years of your customer receivables. With Loading Growth we have a framework to de-risk yourself from the biggest clients and this can be found in our Loading Rates Key.    

If the majority of your revenue comes from only two or three clients, you are in trouble.

When one or two of them suddenly stops, it will greatly impact your business.

To build a successful and sustainable business, you need to have the right revenue mix of clients in your roster.

So what’s the perfect mix?

There’s no such thing as a perfect mix, of course.

But the rationale for this is sustainability.

So, you need to build a sustainable base to ensure your business continuity. 

As a rule of thumb, any client cannot be more than 25% of your annual revenue

The only way to do that is to keep winning clients and grow them, 

While your current large clients continue to grow in absolute terms.

Growing and Retaining Clients

Successful IT services firms understand that the value of a client increases with time.

The longer they’ve been with you, the more valuable they become to your business. 

If you want to keep on winning and retaining clients, you need to meet their needs every step of the way.

Being able to anticipate problems and pain points and provide a solution even before your clients notice them has a huge impact on them. 

 

For more information about this topic, you can find them in the Loading Rates key.

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