Why Bookkeepers Need a Mix of Clients for a Thriving Business
I've been having a few conversations this week with bookkeepers about larger clients leaving for a number of reasons. As a bookkeeper, juggling a variety of clients is key to your business's success and growth. In my business, I always found it important that no single client made up more than 10% of my turnover. I want to look at some of the reasons I think that's really important
Sharing the Risk
A mix of clients helps to spread risk, making sure your business isn't too dependent on any one client. If one client contributes more than 10% of your turnover and they leave, it could really hurt your business. By having a diverse client portfolio, you reduce the risk of financial setbacks and keep things stable. Many smaller clients always seemed less risk that a few larger clients to me.
Rolling with the Punches
When no client represents more than 10% of your turnover, your business is better equipped to handle financial surprises. If a major client leaves or hits a rough patch, your business can still operate smoothly, thanks to a balanced client mix. It's not just about clients moving on through choice.
Giving Your Best to Everyone
By maintaining a range of clients, you can focus on providing top-notch service to all of them without playing favourites. If one client becomes too big a chunk of your turnover, you might be tempted to prioritise their needs, which could leave your other clients feeling neglected.
Broadening Your Horizons
Keeping client concentration in check allows your business to grow by seeking new clients and exploring new markets. If you're relying on one client for a large portion of your turnover, you could be missing out on growth and innovation opportunities that a more diverse client base can offer. By having many smaller clients, lessons learned or tools created for one can often be rolled out to others too.
Staying in Control
Having a balanced client mix gives you an edge in negotiations. If one client dominates your business, they might try to call the shots on pricing and terms, which could hurt your profits and create unfavourable conditions. By diversifying your client base, you maintain more control over negotiations and protect your interests.
Earning Trust and Street Cred
A diverse client base can help build and maintain your reputation as a reliable and professional bookkeeper. Potential clients are more likely to trust your services if they see that you've worked with a number of clients, which boosts your credibility in the industry.
Keeping an eye on client concentration and ensuring that no client accounts for more than 10% of your turnover is super important for bookkeepers. A diverse client base helps you manage risk, maintain financial stability, provide top-quality service, grow your business, stay in control during negotiations, and build a rock-solid reputation. As a bookkeeper, putting in the time and effort to build and maintain a varied client portfolio will not only benefit your business today but also set you up for success in the future.