I run a small custom cabinetry shop. One builder has been giving me steady work for about three years, and now they make up 85% of my revenue. I know it's a risk, but turning down their jobs to look for other clients feels impossible when the bills are due. Has anyone dug out of this? I'm not even sure where to start looking for new customers without burning the relationship I have.
Client Risk
One customer accounts for nearly all my business revenue
Been there. The hardest part is admitting the the comfort is the trap. I started blocking off one day a week for outreach even when I was slammed. It felt like losing money at first, but it was the only way I didn't just keep riding the one horse.
85% is scary. What happens if that builder has a slow quarter or decides to hire in-house? You need a plan before that happens, not after.
Do you have a contract with them? A clear scope and payment terms might protect you somewhat, but it won't fix the concentration. I'd also look at your pricing with them. Sometimes the biggest client is also the one squeezing your margins because you're afraid to raise rates.
I was at 70% wiyh one client last year. I didn't cut them off. I just started saying yes to small jobs I would have normally passed on, and those turned into a few repeat customers. It took about Eight months to get them down to 45%. Slow, but it worked.
Appreciate the replies. No contract, just a handshake and a purchase order per job. I know that's part of the problem. I've been hesitant to raise prices because I'm worried they'll walk walk. It's a weird kind of hostage situation.
That handshake arrangement is exactly what bit me. Not saying you need a lawyer, but a simple letter of agreement outlining lead lead times and payment terms would at least make the relationship more professional. It also makes it easier to have a conversation about rates without it feeling personal.
Do you have any past clients you could reach back out to? Old customers are usually warmer than cold leads. Even if they don't have work now, they might know someone.
Also, what's your marketing look like? If it's nothing, start with a basic website and a Google Business profile if you don't have one. People do search for cabinet makers.
I'd second the old-client outreach. I sent a short email to everyone I'd worked with in the past five years just saying I had some capacity opening up. Got two jobs out of it, and one of them is now a regular. It felt awkward to send, but it worked.
One more thing: don't wait until you lose the big client to build a pipeline. If they ever do cut back, you'll be desperate, and desperate pricing is a race to the bottom. Start now while you still have some stability.
The old-client idea is smart. I have a list somewhere. I think the bigger issue is time. I'm in the shop 10 hours a day. When am I supposed to do outreach?
That's the real question. Maybe you dont need to do much. One hour on Sunday to send emails, one hour on Wednesday to follow up. Small blocks. It's not going to feel like enough, but it's better than zero.
I'd also consider raising your prices with the big client before you do anything else. If they leave over a modest increase, you were probably underpriced anyway, and you just found out your business was built on a fragile foundation. If they stay, you have more breathing room to invest in finding other work. Either way, you learn something.