When best laid plans go awry

Published on Saturday 29 January 2005 00:55

WHEN I started my financial services training business in 1990 after being downsized from a job I loved, an important Wall Street technology firm became my first client. Last week I received a call telling me that the company had eliminated its entire corporate training department.

Everyone I had worked with, designing and teaching a series of courses for most of the past 14 years, was gone. And so was virtually all the income I had expected to earn from the company in 2005. What a wonderful beginning to the new year.

Each year in late December, I make financial projections based on my training work. The money I pay myself from my business is my income base. I do not include earnings from television or publishing work as they are too unpredictable.

With my business, I have more control. I know from experience that I can increase revenues and, therefore, what I earn through my own sales and marketing efforts.

From conversations with friends, colleagues and competitors in financial services, I had already concluded that 2005 would be a difficult year in the training area. I had, therefore, projected that my business revenues would be flat or would increase only modestly compared with 2004. And, as always, I targeted two or three companies I wanted as new clients.

I never imagined that this company, my stalwart first client, would, after nearly a decade and a half, disappear from my cashflow. When I heard the news, the feeling in the pit of my stomach was the same as on the day I was let go from my job on 9 January, 1990 - a day I will never forget. This surprised me.

However, it took me just a few days to get my feeling of vulnerability under control. Nonetheless, there were nights when I awoke from anxiety dreams feeling a failure and as if financial destitution were just around the corner. And the adage "expect the unexpected" would pop up in my mind again and again with throughout the day.

The first thing I did was to compute the percentage of my turnover that came from this company last year and what percentage I had projected for this year. To be honest, it was far higher than I would have liked. I then reviewed the model I used when I started my business.

Like many small businesses, I started with one client (the company mentioned above) that generated 100 per cent of my revenues. My short-term goal was to reduce my dependence on it to 40 per cent of my revenues as quickly as possible. I worked hard to ensure that the remaining 60 per cent came from a diversified group of financial services companies.

My long-term objective was to build a client base in which one company never made up more than 15-20 per cent of my continual revenue stream. Of course, there were years when a single company would be 40 or 50 per cent of total turnover because of its increased training needs. But, overall, I kept to this part of my plan.

But all of this is now yesterday’s news - useful insights, but decidedly in the past. I have to focus on tomorrow because that is the only part of this situation that I can change.

The good news is that my original strategy, combined with my low overheads and savings has given me a cushion, some breathing-space (on some days, however, it does not feel that way).

I am turning my anxiety into a positive force: I am using it as a motivator to boost sales while re-envisioning (or even re-inventing) my business and its client base. The reality of the situation is clear to me: if this client has made cutbacks, others will probably do the same. I must be prepared if I want my business to survive.