Many consultancies and agencies get started by winning a single big client. They work hard to keep that client satisfied and keep them spending, often with great success.

You can build a seven-figure business this way with a good tailwind, and it's exactly the advice most people would give you: focus on your key client, turn them into fans and increase their spending. With no nasty acquisition costs you'll print money!

It sounds like it all makes sense, except that it doesn't (quite). The problem is that it completely ignores concentration.

With most of your revenue coming from one (or maybe two) clients, it only takes a small change beyond your control — a strategic re-think, budget cut, or supplier consolidation — and you could take a massive revenue hit, need to lay off staff, or lose the whole business. I've seen it happen too often.

For any small business lucky enough to win a big account, acquiring more clients is a priority. The goal is not to milk your biggest customer dry — it's to ensure you can survive without them.

Having ten clients paying $100K each is much less risky than one paying $800k and four paying $50k each.

Yes, you may be less profitable in the short-term this way. But long-term, well, you might actually have a long-term.

See this post on LinkedIn