Assertive, Intelligent Representation For Public & Private Entities

How common is reliance on a single customer among small companies?

Among the things small businesses vary greatly in is what their revenue streams look like. Some small businesses get their revenue from a variety of different sources. Others have just a few sources. For example, there are some companies that get a major chunk of their business from just one customer.

How common is relying on a single customer for the bulk of one’s revenue among small businesses? A recent survey points to it being relatively common.

In the survey, around 4,000 small business executives from the U.S. and Europe were polled. These executive came from companies with under 50 employees.

The survey results suggest that around 16 percent of small businesses get at least half of their revenue from a single customer.

There were some types of companies that were particularly likely to have a heavy reliance on a single customer. The industries that held the top spots in this regard, according to the survey results, were the transportation and business services industries.

A company getting most of its revenue from one customer can raise some special issues for the business. For example, special concerns can come up over the handling of legal issues that arise for the company. For example, when such issues come up, a business owner may be worried about what impacts the matter could have on their relationship with their top customer and wonder what they can do in the handling of the matter to best preserve this relationship.

As this illustrates, the types of issues and concerns that can be present for a small business in relation to legal matters can vary greatly based of the specific circumstances of the company, such as the nature of its revenue streams and customer base. Skilled business law attorneys can assist small business owners with tailoring their approach to legal matters to the unique concerns and issues present for their company.

Source: Small Business Trends, “16 Percent of Small Businesses Rely on a Single Customer,” Rob Starr, Sept. 21, 2017