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Good clients with a substantial margin are great but you can always lose them even if you have done nothing wrong. A few years ago my old employer kept a client following a private equity buy out but at a substantially reduced margin following a re-tendering process designed to make the supply chain pay for the buyout. Having a few clients is very risky no matter how good you are especially in this current business climate.
For me the Jerry Maguire approach is better where you do more and better work for a smaller number of clients.
I suppose that knack is to have enough clients that you are working for that 1 or 2 on their own are not significant or will leave a black hole in your business if they moved on.
In my last FD role we were a reasonable sized company but used a lot of "one man band suppliers" who had grown up around the company and we effectivly were 30/40% of their business which allowed us to bully them (not me by the way) as without us they would not really be viable and that was a bad position for them to be in as we exploited the position.
The worry for me is that with MTD coming the thought of dealing with many small clients would be very daunting as the admin and management around it could see you swamped and managing the workflow would be difficult and inefficent.
Also the fee impact on once a year small jobs is likely to be significant whereas the bigger companies that already do quarterly accounting are arguably not that far away from where they need to be.
You have made several good points. In the few client environment the client can make demands and it's difficult not to comply. It's been said IKEA goes back to its suppliers and says "now that you have been delivering a product for us for awhile, you have logically developed cost savings in your process. We would like you to pass these along to us so we can pass them along to customers.
One of the advantages of many clients is the ability to build many of them into something larger.
In some cases today's small client will represent tomorrow's big client. There's usually no way of successfully predicting this so perhaps as many small clients as possible is the way to go.
So true. Taking it to the extreme "somebody is going to win the lottery." Providing you can maintain the desired level of service you want to deliver, the many client approach has its advantages.