Client dependence is a huge issue. SMEs that rely on a single customer for more than half their income should be concerned, as they’re totally dependent on that client to stay profitable.

Even banking heavily on a short customer list can put an SME in a precarious position. You simply never know when one or more clients might decide to pull the plug because you were slightly late on a project, or there is a change in management and the new person decides to “go in a different direction”. Just as likely, they go bust.

According to Ian Smallwood, head of business services at the UK’s Let’s Do Business Group, it’s important to be prepared for worst-case scenarios.

“If one of your biggest customers went under, what would be the impact on your cash flow?” he said. “Or even if they took a month or two longer to pay? Would it be fatal or just a bad cold? Could you realistically trade through it?”

He said that risk may not only come from a single customer hitting a rough patch, but from a shared industry.

“If your top three customers were all in house building, for example, and there was a significant slowdown or downturn in that industry, the likelihood is that they would all reduce or stop orders at the same time.”

Often an SME has a target customer – the people who are most directly impacted by, or would be directly interested in, buying your product or services. And while most sales and marketing efforts target these customers, it can be a lost opportunity when companies do not look beyond the obvious.

How to bring in new customers

Zabeen Ahmed is founder and chief innovation officer at Dubai business advisory SEVIA. She said diversifying your client base is central to sustaining a business and keeping the cash flowing.

“It is usually the case when companies start operations that customers they never would have believed to be interested in their offering are indeed interested, and products or services they didn’t previously believe to be in such demand are the ones actually bringing in the most revenue,” she explained.

“Application of a business model, experience and operations are the best teachers. Insights gained from doing business are a key pillar in starting to diversify your client base. When you start to listen to the market, gain valuable customer feedback, and begin to tailor your business model, your products, your services, and your customer experience to market demands, the business will bring in new customers. Apple is a great example of this – they went from a dying computer company to a cutting-edge, modern, contemporary and exciting brand centered around youth and innovation.”

Ahmed also suggests selling advertising to companies, especially if your product is in the hands of a lot of people. This means you will be able to depend on your physical sales and the sale of advertising space.

Today, one of the most vibrant and inexpensive forms of advertising is social media.

“Previously thought to be the domain of tech companies and online retailers, social media has increasingly become a portal of business for everyone from banks to hospitals to law firms and writers.”

Another sometimes overlooked route to diversification and a source of new business is strategic partnerships and affiliation with industry events and shows.

“Unique partnerships with sponsors, events, and distributors are sometimes overlooked when revamping your marketing effort and they can be key to helping create a diverse client base,” said Sebastian Tontsch, co-founder of Dubai content agency Blowfish Media.

“Word-of-mouth referrals are a fantastic way of getting paying customers, and the more varied the types of ambassadors you have, the more varied the potential customers are that will receive the marketing message. In short, get out there and meet people. There are real long-term gains from just interacting, the cold call or direct marketing approach isn’t the only way to do things.”

Diversifying a client base is all about diversifying a company’s way of thinking and its approach to its business, he concluded.