This transcript was generated from the episode audio and may contain minor errors.
[Music]
A lost contract leads to 50% revenue drop. That doesn't sound good. That doesn't sound good at all. Well, it must be our weekly segment known as Failure Friday. Not about a case study of somebody who makes a million dollars or even $100,000.
It's more like a case study of something that goes wrong. And how does a side hustler, small business owner, entrepreneur adjust in this situation? What do you do when you have an outcome that is less than desired? Welcome to Side Hustle School. My name is Chris Guillebeau, your host.
Just like our Throwback Thursday segment, you get to hear directly from a side hustler or small business owner who has struggled to get something off the ground or otherwise encountered a difficulty, often a serious difficulty. In this case, we've actually got someone, Peter. He is a consultant. He had a, what he calls a dream contract, a great contract that lasted for a long time. And it was so great that he kind of became dependent on it.
And it turned into half of his revenue. Now, as you might guess already, something goes wrong along the way and he loses that contract. So how does he adjust in the context of this difficult situation? And what might we all learn from the story? What did Peter learn from it?
What might we take away as we are building our side hustle or whatever it is that you're working on over there? Let's hear the story from Peter. We'll have a few things to say at the end, but we'd like to keep the focus on our storytellers. So over to Peter. [Music]
In the world of consulting, there's an old adage that says, "Never put all your eggs in one basket." I learned this the hard way when I lost a major contract that once brought in half of my primary income.
It all started three years ago when I landed a dream contract with a mid-sized tech company. They needed an extensive overhaul of their customer service training programs and I was just the person for the job. My business focused on helping small to mid-sized companies improve their customer service and employee training systems. The contract was lucrative and the work was challenging and rewarding. Over time, this tech company became my primary client and I found myself dedicating the majority of my time and resources to their needs.
At first, everything was perfect. The steady income allowed me to sustain my business comfortably and invest in better tools and technologies. However, as the years went by, I became increasingly comfortable and complacent. The stability lulled me into a false sense of security. I neglected to seek out new clients or diversify my services, thinking that the steady flow from my primary client would never go away.
But then, out of the blue, the unexpected happened. The tech company underwent a significant restructuring. New management came in with a different vision and they decided to cut down on external consultants. My contract, which had seemed like a permanent fixture in my business, was abruptly terminated with just one month's notice. I was blindsided.
The immediate impact was devastating. Losing 50% of my income overnight left me scrambling. I had bills to pay, a mortgage, and personal commitments. The reality hit hard. I had become too reliant on a single client and failed to properly plan for such a contingency.
It was a stark wake-up call. In the aftermath, I took a step back to evaluate my business. The first thing I did was to reduce overhead costs to stabilize my financial situation. I had to make the tough decision to cut back on non-essential expenses and streamline my operations. It was a painful but necessary step to ensure survival.
I then focused on rebuilding and diversifying my client base. I reached out to former clients, letting them know I'd offer them a discount if they'd return. I also diversified the services I offered, expanding into areas such as online training modules and virtual customer service workshops. This not only opened up new revenue streams, but also made my business more resilient to future market shifts. I also revamped my website, engaged more actively on social media, and started spending 20 minutes a day writing to people on LinkedIn.
These efforts paid off gradually as I began to secure smaller contracts that collectively contributed to a more stable income. Over time, my business slowly began to recover. The experience taught me the critical importance of diversification and planning for the unexpected. I now maintain a diverse portfolio of clients, ensuring that no single contract exceeds a certain percentage of my overall income. Looking back, losing that major contract was a painful lesson, but it was also a pivotal moment for me.
It forced me to reassess my approach and build a more sustainable business model. Today, I am much more attuned to the risks and opportunities in my field, and I'm better prepared to navigate the uncertainties of the consulting world. Still, it didn't feel great when it happened. [Music]
It's so easy to become dependent on a big contractor, a big deal, I've done it myself. And then you're just like, this is great, it'll never end.
Even if you know kind of intellectually, okay, that's, you know, this is risky. I should think about diversification. It's just hard, right? Because you're like, this money's coming in, I've got great work, it is the dream contract, and then it goes away. So in some cases, it's just like the circle of life, right?
The circle of life of small business contracts, but obviously the more we can be proactive to diversify our income, which is why I have this podcast in the first place, to encourage you to create new sources of income, then that will make things easier for us later on. So big thanks to Peter for sharing the story. Big thanks to all of our listeners as well. Thank you, sidehustleschool.com. There's some resources, notes page for every episode.
This was episode 2,757, two, seven, five, seven. We'll be back tomorrow, always completely free. I hope you'll join in. My name's Chris Guillebeau, this is Side Hustle School. [Music]
From the Onward Project.
