Operations & Systems
The question is easier to answer on a calm day
For many small businesses, one customer is a large share of the work. That customer is also the one the business is shaped around: the capacity, the staff, the schedule. Losing it would not only hurt the accounts. It would leave people, space and machines with nothing to do. This session looks at the operational side: what you would do, what would warn you, and how to widen the base without neglecting the customer you have.
Explore this page6 sections
A big customer is a gift and a risk at the same time.
One large buyer brings steady work, simpler planning and often a good relationship. Over time the business arranges itself around that customer: the schedule, the staffing, the stock, even the way prices are set. The dependence is rarely a decision. It grows because the orders keep coming.
Customers leave for reasons that have nothing to do with how well you served them: they change their own supplier policy, shift production elsewhere, are acquired, cut budgets or close. Sometimes they leave because of a service failure you could have prevented. Either way, a business that has never imagined the loss will lose weeks deciding what to do.
Depending on one customer has a financial side too, which is a separate conversation. This session stays with operations: people, capacity, schedules and the plan for the first thirty days.
What the session works through
36 topics across 7 areas. Seven pieces of an operational answer.
How Dependent Are You?Work it out rather than feel it.5
For illustration only, with made-up numbers: if one buyer accounts for four in every ten orders, losing them removes forty per cent of the work and leaves the same rent, salaries and loan instalments. There is no standard safe percentage. The point is to know yours.
- Your biggest customer's share of orders or work, over the last twelve months
- The same for the top three customers together
- How much of your team's time, space or machinery serves them
- Which things you do only for them
- How long the relationship has lasted and how it is governed: a contract, a regular order or a verbal understanding
Early-Warning SignsCustomers rarely leave without signals.6
- Orders getting smaller or less regular
- Payments slowing down
- New questions about your prices, quality or capacity
- Contact moving to people you do not know
- A change in the customer's own business: new owner, new plant, new suppliers
- Requests for samples or quotations from competitors, if you hear of them
Write the signs down and review them monthly. If two or three appear together, treat it as a prompt to talk to the customer, not to panic.
Strengthening the Relationship ItselfDiversifying does not mean neglecting the main customer.5
- Regular, honest conversations about what is working and what is not
- Knowing more than one person at the customer
- Reliable delivery and quality, with problems raised early
- Understanding what the customer needs next year, not only this month
- Putting the working terms in writing and keeping them up to date
A Thirty-Day Contingency PlanWhat you would do on Day 1, Week 1 and Week 4.5
Writing this down does not make the loss more likely. It means the owner starts at Day 1 with a list and not a blank page.
- Day 1: confirm the facts, tell only the people who need to know, protect cash
- Week 1: list the costs that can be cut, paused or renegotiated and how fast
- Week 1: decide what to say to the team, honestly and without alarm
- Weeks 2 to 4: contact existing customers and past customers with capacity to offer
- Weeks 2 to 4: decide what spare capacity could be used for, even at lower margin
Spare Capacity and Redeploying PeopleThe operational problem behind the financial one.5
- Which team members and machines could serve other customers or products
- Which skills are specific to the big customer's work
- Whether short-term arrangements, such as reduced hours, are possible
- What you would do before letting anyone go, and what you would check about your obligations
- How to keep skilled people through a gap
Employment rules apply. Check the current requirements and take advice before any decision about people.
Building a Wider Base, SteadilyA habit, not a project.5
- A target for the number of active customers, set by you
- A small weekly routine: two conversations with prospects or past customers
- Offering an existing capability to a neighbouring group of customers
- Using referrals from happy customers
- Tracking how the share of the biggest customer changes quarter by quarter
Terms to Review With an AdviserA lawyer or adviser can tell you what applies to your situation.5
- Notice period on either side, if there is a written agreement
- Minimum order commitments, if any
- Payment terms and what happens to unpaid invoices
- Ownership of any tools, moulds, designs or materials held for the customer
- Exclusivity or non-compete terms
This session does not give legal advice. Take your own agreements to a qualified professional.
Bring to the session
- Your sales or order records for the last twelve months by customer
- Any agreement or written terms with your largest customer
- A rough list of your fixed costs
- A list of past customers you could contact
- What you would say to your team
What the session does not do
- Ask you to reveal customer names to the group
- Give legal or financial advice
- Advise you to leave or reduce a customer you value
- Predict whether your customer will stay
How the session runs
A practitioner begins by working through a made-up business with one dominant customer, to show how the plan is built. Participants then calculate their own dependence on their own records, draft their early-warning list, and write their thirty-day plan in rough. The group closes by choosing one small diversification action to start within the week. Nobody has to share figures aloud.
What your students leave with
- A simple view of how much of your work depends on your biggest one or two customers
- A list of early-warning signs specific to your customer relationships
- A thirty-day contingency plan: what you would do about people, work and costs
- A practical diversification plan with small steps you can start this month
- A plain checklist of the terms in your dealings with that customer to review with an adviser
- A healthier habit of keeping the main relationship strong without depending on it
Scheduled sessions
Nothing scheduled yet
Sessions are arranged with a college once a date is agreed. Ask us and we will find the right person for it.
A student rather than a college? See what is coming up, or ask your placement team to host this.
Plan for the loss while the customer is still happy with you.
Tell us who your students are and what stage they are at. Sessions are free for participants.