We survived losing a major account. What contingency plan should we build before it happens again?

Question

Tyler Smith · Accepted Answer

Build a plan that can be executed, not a document that merely acknowledges concentration risk. Start with the customers whose departure would materially change cash, profitability, or operating capacity.

For each significant exposure, model the loss using realistic notice periods, collections, delivery obligations, and cost-adjustment timing. Include highly profitable customers. A strong relationship and attractive margins do not guarantee permanence.

Define the response before another departure:
- Who verifies the facts and communicates with the customer?
- Who updates the cash forecast and reviews contractual obligations?
- Which spending commitments can pause, and under what conditions?
- What triggers a broader operating adjustment?
- Who communicates with employees, lenders, and other affected parties?

Add warning indicators, but recognize their limits. Changes in buying patterns, unresolved complaints, sponsor departures, and delayed decisions may justify investigation. None proves that a customer will leave, and some losses arrive without useful warning.

Review customer concentration alongside financial performance in your regular operating rhythm. A company can grow while becoming more fragile if most new revenue comes from the same account or closely related customers.

Make diversification an ongoing priority with defined ownership, not a temporary campaign that ends when sales recover. Test the contingency plan whenever the customer mix or cost structure changes materially.

The standard is practical: could the leadership team recognize the trigger, make the necessary decisions, and act without rebuilding the plan under pressure?