A huge risk to growth in business is the number “one”. Dependency on one major client. One key employee. One product. One major supplier.
A client is facing this with a supplier. He’s a reseller of what used to be a great product. But over the last couple of years things have gone downhill.
The supplier was bought out and the new owners aren’t putting in the resources to support the product, let alone make improvements.
Which leaves my client in the lurch. He really wants to support his clients and so spends 80% of his week diagnosing and fixing issues which really should be fixed by the vendor.
But the vendor doesn’t appear to care.
To add insult to injury, my client pays a significant fee to the vendor as “maintenance” for each licence.
I asked, “What will happen if the supplier finally pulls the plug?” “Well, that would be a major blow to my business!”
A major risk!
So this is what I recommended.
First of all, control what you can.
Immediately look for other suppliers. Choose three.
Why three? One is no choice. Two is binary. Three gives you options. Both to you and your clients. It’s not an either/or take it or leave it proposition.
I suggested 3 levels of product.
Product A: Silver (lowest price/functionality)
Product B: Gold (Sweet Spot)
Product C: Platinum (High end. Only a few will buy it – but unless you have it no one can!)
Which means you can recommend the best fit for individual circumstances.
And as our client is an expert in his industry, move from being “just” a reseller to providing consultancy and training for his clients. This is where he provides real value and differentiates himself from other re-sellers, and adds another string to his bow.
After our session today he realised he needs to completely revamp his business model which we’ll do over the coming months.
So where are you vulnerable in your business? What are you doing to first identify and then mitigate risk?
Sometimes we’re too close to our own stuff. Which is why I always recommend having another pair of eyes look at your business and ask what might be difficult questions. If you’d like our help to grow, let give me a call.
Sleep with one eye open!