Landing the big fish without the risks

It’s the dream for many SMEs to land a new, big client.

Opportunities for growth are often few and far between, and almost always include elements of risk for the smaller operator. But with the right preparation, landing a “big fish” can reshape your business and set it up for future success.

The benefits of landing the “big one”

Some of the benefits of landing the big client include:

  • Increased revenue – bigger clients generally have bigger budgets, and are better at forecasting work, so when they order big, they do so confidently.
  • Regular cashflow – typically, the contracts are longer term, meaning more predictable cash flow.
  • Opportunities for growth – greater certainty around revenue means you can focus on your growth.
  • Greater credibility – landing a large, well-known client can improve your own brand.
  • Networking opportunities –you may have the opportunity to sell to other divisions, suppliers, or new contacts.

But there are risks

While there are many advantages to working with big clients, there are also risks involved in taking on large contracts.

  • Dependency – losing a large client can leave a huge hole in your revenue. In some cases, if a large client ends the relationship, it can even lead to the insolvency of a smaller business.
  • Demanding and slow – larger budgets come with bigger expectations. There may also be many layers of process and approval, slowing you down and taking your focus away from other clients.
  • One-sided price negotiation – with bigger clients you often have less power to negotiate on price or payment terms.
  • Slow payers – larger clients may take a long time to pay your invoices, something that can lead to cash flow issues for your business.
  • Increased costs to upscale – You may need to upscale your business in order to deliver to your large client, which can further strain cash flow.

A real-life cautionary tale

At Apricity we see many SMEs who land big clients. Sadly, not all matches are made in heaven. In one case, a food manufacturing business won a contract with a supermarket chain. Due to the success of the range, they were asked to develop more products based on the supermarket’s suggestions. While in the R&D phase, the business-focused solely on the needs of their golden goose. They stopped looking after their smaller customers and quickly ran into crippling cashflow issues.