It has been said that necessity is the mother of invention. In this Wall Street Journal article, Big Firms Fill Funding Gap, the author shares how big firms still need their smaller suppliers and vendors. So much so in fact, that some large firms are stepping up and providing working capital and bridge loans to help their smaller counterparts grow and become well-established companies.
For entrepreneurs and owners of smaller firms, having just a few large customers, i.e. customer concentration, greatly increases overall risk in the ownership and operation of the business and can become a real value detractor when it comes time to sell. However, used wisely, and with a well thought out strategy for how you will eventually become independent from this “helping hand,” leveraging the relationships with your larger customers can be a winning strategy as this article points out.
