Are All Your Eggs in One Basket?

eggs-in-one-basket

Does your business rely on one customer to generate a large percentage of your revenue? According to Forbes magazine, many fast growing companies fall into the trap of having one customer account for over 50% of their revenue. When a client’s business grows rapidly and becomes a major revenue source, your company can become overly dependent on them. Future cash flow and profit increasingly depends on the client which makes your company very vulnerable to changes in that customer’s financial position and management. According to Forbes, no one customer should account for more than 20% of a company’s business.