Why Your Client Mix Matters More Than Ever: A Lesson from Recent Tariffs
That 3AM worry about cash flow? For many agency and firm owners, it often traces back to being too dependent on one type of client. Recent US-Canada trade tensions have highlighted why diversifying your client mix isn't just good advice – it's essential for building a sustainable business.
The Wake-Up Call No One Asked For
Picture this: You've built a solid roster of retail clients for your creative agency. Your projects are flowing, your team is busy, and then – trade policies shift. Suddenly, those same clients are facing increased costs, and their marketing budgets are the first to get cut.
While service-based businesses don't pay tariffs directly, our clients do. And when their costs go up, external services like marketing, PR, and design often face the squeeze.
Breaking Free from the Single-Industry Trap
Ask yourself this question: If your biggest client's industry tanked tomorrow, would your business survive?
If that question makes you uncomfortable, you're not alone. Many agency owners find themselves overly dependent on a single industry, often because that's where they built their initial success.
Your Diversification Checklist
Look at your current client list and check for balance across:
Industries (aim for no more than 30% revenue from any one sector)
Client size (mix of small projects and larger retainers)
Geography (local vs. international exposure)
Contract types (one-time projects vs. recurring revenue)
Starting Small, Growing Smart
You don't need to transform your business overnight. Start with your next three proposals. Here’s are growth strategy examples you can consider for your agency or firms.
The Numbers That Matter
First, get these foundational metrics in order (review monthly):
Gross margin (aim for 50-70% depending on your service mix)
Net profit (target 15-25% minimum)
Months of cash reserves (build toward 3-6 months)
Average days to get paid (target under 30 days)
Then track these client mix metrics:
Revenue percentage per industry (no more than 30% in one sector)
Average project value per sector
Profit margins across different client types
Client retention rates by industry
Revenue from recurring vs. project work
Your Next Steps
List your current clients by industry
Calculate what percentage of your revenue comes from each sector
Identify 2-3 new industries where your expertise could add value
Create a simple plan to reach out to these new sectors over the next quarter
Building a sustainable creative business isn't just about getting more clients – it's about getting the right mix of clients. Your future self (and your 3AM anxiety) will thank you for starting now.
Need help analyzing your client mix and creating a strategic growth plan? Book a call to discuss our Sleep Better Financial Review. We'll help you understand exactly where your business stands and create a roadmap for sustainable growth.
