What you are seeing
The figures are invented to show the pattern. They are not what any business should expect.
| Number | Three months ago | Now |
|---|---|---|
| Available cash | R150 000 | R160 000 |
| Share of the largest customer | 25% | 30% |
| Share of the largest three | 45% | 55% |
Cash rose, and so did the dependence.
What it could be revealing
| It could be revealing | How to tell | You could |
|---|---|---|
| The big customer is growing while others shrink | Sales by customer over twelve months | Set regular time for finding new customers |
| Cash is high because of a deposit from that customer | Deposits held for work not yet done | Treat the deposit as work still to deliver, not spare cash |
| Selling has slipped while you deliver | New customers in the last three months | Book selling time before delivery time |
| The contract is short or near renewal | Contract end date and notice period | Agree a longer contract, or a notice period you can plan around |
| The customer sets your prices | Your margin on them against other customers | Decide the lowest price you can accept |
Check these first
- Customer concentration: what would leaving cost?
- Runway: what does the stress test say?
- Revenue trend: are sales growing without them?
- Debtor days: how do they pay?
Questions people ask
How do I plan for losing my biggest customer?
Work out how much gross profit they bring in, then how many months of runway you would have without it. Use that to decide how much time to spend finding replacement customers before you need them.