Would you rather have one good client paying you five thousand dollars per month or ten smaller clients paying you five hundred dollars each per month? Here are two goodreasons for choosing multiple clients over just one client.
1. Avoid Dependence on One Client
Don't put all your eggs in one basket. If you have only onemajor client and lose them, you have zero income overnight.
Knowing that they are your sole (or main) source of income, some clients will make some unfair, unreasonable demands ofyou. They can get away with it because they know you arein a very poor bargaining position.
You could also end up losing a good client for reasonsbeyond your (or even their) control. Bankruptcy, sale orbequest of the business to someone else, or a new managerwho has made other arrangements are just a few ways youcan lose such a client.
You are much better off to have several clients. If youlose a client that represents ten percent of your income,you still have ninety percent of your income left.
2. Clarify Your Self-Employed Status
Self-employment status has certain tax advantages overbeing employed. Although there are other factors toconsider in making this determination, the more clientsyou have, the less likely that you will be classified bythe tax authorities as being an employee.
For example, if you do all your work for one client at his office, a good case could be made that you are his employee. If you work for two different clients at their offices (oreven your own), a case could be made that you have twodifferent part-time jobs.
On the other hand, if you have a hundred different clients you work for, it is unlikely that anyone would argue that you have one hundred part-time jobs.
So, to avoid dependence on any one client and to clarifyyour self-employed tax status, choose several clients overjust one or two clients. For increased success and to bea truly independent business, obtain multiple clients.
RESOURCE BOX:
J. Stephen Pope, President of Pope Consulting Inc.,has been helping clients to earn maximum business profitsfor over twenty-five years.
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