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1 [:1 S 1P. 1 • !IA
Page 14
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January's survey asked operators about the balance of their business: how much is your biggest customer responsible for?
The results are a little worrying, with more than half of all respondents operating in the danger zone of more than 20% of their business being with one customer:
• Up to 10% 23% • Up to 20% 26% • Up to 40% 19% • Up to 60%11% • More than 60% 21% Perhaps most worrying is that final category. Indeed a handful of respondents noted that not only are they perilously exposed by having more than 60% of their business with one customer, but also that their biggest customer's volumes are dropping. Ouch!
However, and this again is worrying, 59% are not concerned about the level of business their biggest customer is responsible for.
Of the 37% that are concerned, their ways of addressing the issue vary. Some are developing better credit control (so at least that one, big customer is on as short a leash as possible), while others are trying to find more, new customers.
Here are two comments highlighting different attitudes to new business development: • We are widening our client portfolio to encompass new industries." • "We're wary of taking on new clients who might not pay, so we're not really chasing work. We are working hard at keeping everybody happy.'' One respondent revealed that their biggest customer accounts for 10%, and that they have more than 100 active customers — that sounds healthy to us. That operator also said: "Ten years ago we had 85% [of our business] with one customer."
Another operator highlighted an issue that could come to affect many operators as the recession continues to bite: ''We are concerned because [our biggest customer] is in the process of merging with another company and we are not sure of the outcome,"