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How many IT service contract clients does your firm have that you see at least once a month?



A. 0
B. 1-9
C. 10+
Asked by Chapman, Last updated: Jul 08, 2020

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1 Answer

John Smith

John Smith

Answered Sep 09, 2016

10+-its very difficult to build a profitable technology provider business around the needs and whims of one-shot-deal customers. to grow a sustainable, forecastable, and scalable business, build your client list with small businesses that need outsourced it services at least, at the absolute minimum, once a month. however, thats only half of the challenge. for very small technology providers, revenue is often highly concentrated among the firms two or three biggest clients. this intense revenue concentration exposes the business to big risk if, for example, the loss of the firms two biggest clients equates to an overnight loss of 80% of the firms monthly revenue. while its nice to have small business clients that generate a lot of recurring service revenue, its even better when your recurring service revenue is diversified enough to minimize risk. even if your firm is just starting out with it service contracts, try to ensure that your biggest clients arent causing you to put all of your eggs in one basket. in much the same way that many build their retirement accounts or kids college accounts with diversified holdings in stocks, bonds, mutual funds, and cash, strive for at least 10 distinctly different clients that you see at least once a month, even if some of these clients are relatively small.
 

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