Sure it can and in many ways. One good way to kill your business is having too few customers for too long.
This issue is often overlooked by many SMEs or it is fully acknowledged, however not much is done about it.
While Bellevue SME Advisors advices SMEs in Europe, we always emphasize that the entrepreneur has to spread the revenue risk by relentlessly acquiring new customers.
Recently this has come up again with several SMEs, who just before succession planning are failing to show moderate growth or in the worst case show a clear decline in sales due to customers stopping orders.
There are so many things that can happen to your customer, and you have zero influence on these:
- Customer is planning to outsource parts or its whole production and your purchasing contact didn’t even care to inform you in advance! Well, he didn’t know probably either.
- Purchasing manager has moved on to tackle new challenges. The new one, doesn’t know you and couldn’t care less about SMEs. He wants to buy from his pal (oh, yeah, this does happen regardless of compliance procedures)
- The client is taken over by another company (probably a larger one) and the buying CEO wants to implement his synergy plans – guess what -- you are not part of this plan!
- A consultant is running couple of SCM improvement projects in the client company and they already know the results before they have begun. Did you have a relationship to this consultant before they got the mandate from your client. You didn’t, how could you, because this was and is clients internal matters
These examples, real life, show that there are many “walls to hit and really with high speed”.
The only way avoiding hitting the wall is to spread the risk early enough.
Urge your salespeople to bring you new buying customers and fast. Make it clear to the whole organization that this is vital for survival.