I came across and interesting article today from the Financial Post, about an internet marketing company who was relying on a loophole in Google's adwords policies as their primary source of revenue. They were a hundred million dollar company, until Google closed the loophole. Game over. Just like that.
It got me thinking about a situation we faced a number of years ago. I had met a producer for a huge government contracting agency, one of the many "Beltway Bandits" that do business in the Washington DC area. I had been brought on to do steadicam for a small job he was doing, and we hit it off. I sent him a production reel from Pixel Workshop, we had lunch, and agreed to keep in touch.
Not long after that he called and asked me to attend a meeting he was having with one of his clients, a government agency who needed a promotional video. This video was a tiny component of a multi-million dollar contract, but as part of the contract it needed to be done, and my new contact was looking for us to handle the job. I attended the meeting, where a lot of interesting, creative ideas were exchanged, and I left feeling like I had a clear picture of what they needed. My contact asked us to put together a proposal, and assured me that this project was ours, that he was going to take care of making sure we would get the job.
Needless to say, this was good news. It was a substantial project, in the low six figures, and put us in good financial shape for the rest of the year. We started planning for the job, making sure that we had the resources lined up, and that we didn't have too many other "little" jobs in the pipeline that would distract us from this whale of a project.
It was all good, right up to the point where we didn't actually win the contract. Despite the assurances from my guy, someone came in with a bid that was substantially lower than ours, and the government agency went with it. It hit us hard, and made for a lean year, in part because we had eased up on gathering other projects, in anticipation of this big one landing.
The lesson here is to be very careful about relying on one or two big clients for the majority of your income. You may have someone there who loves your work, but what happens when she moves on, gets fired, or when a new CEO takes over and decides to take the company in a new direction? I've seen it happen many times over the years, and as a result we make a conscious effort to not let any one client become a critical source of income.
This is not to say you turn down their business, of course, but it means that as busy as you get with them, be sure you carve out time in your schedule to continue marketing to and serving your other clients. Actually carve out the time on your schedule, block it out, and use it. When you plan out your scheduling for a new, big job, don't let it consume your entire schedule. Plan out your core "business" activities, like marketing, schedule them, and plug in that new project around them.
I know, I know, easier said than done. But it's an important concept to keep in mind, and can help smooth out the financial roller coaster that can be running a small business.
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