It’s no secret that the economy is undergoing a massive correction. Inflation is high, interest rates have gone up and many businesses are struggling to stay afloat. As fears of an even bigger recession loom large, is it time to diversify your existing client base?
Absolutely. It’s never good to put “all of your eggs in one basket,” and definitely not wise when you know that the economy is having problems. Your business can survive – and even thrive in – a recession best when you’re diversified.
What are the benefits of diversifying your client base?
Obviously, a diverse client base helps mitigate risk. When you have a small client base, every account takes on exaggerated importance – since you cannot afford to lose any of them. Even if you’re pretty sure you can keep your customers loyal and keep them from going to a competitor, you can’t prevent them from having their own economic issues that could keep them away.
However, that’s not the only reason to diversify your clients. A healthy mix can:
- Prompt product line development and innovation: You cannot stay stagnant in the modern business environment. As you reach out to people and companies with different needs, that can lead to the creation of whole new products or services to add to your existing line. Creativity can be stifled when the clients all want the exact same thing.
- Add value to your company’s profile: If you need financing to help you grow or just to get over a bump in the road, you need to show an investor or bank that your company is viable. Multiple lines of revenue and a wide client base make you a safer investment than any company that relies too heavily on just one customer.