Over the weekend news broke that a machine shop in Milwaukee is closing:
http://www.jsonline.com/business/42032657.html
It's reported that the shop, Universal Brixius, saw its business flatline as customers closed plants.
How beholden do you feel you are to the financial health of your customers? As they go, so do you go? Or are you independent enough from your customer base to stay afloat no matter what happens to them? Does this affect how you do business with them in any way?
I was told by my accountant that no customer of mine should owe me more than 25% of my receivables. Good advice.
I like to think my customer is my boss, his customer is the owner, and the owner's customers (other companies) are the income of the business. Those companies have customers, and their customers are likely wholesalers, who have customers who are distributors, who have more customers who look alot like me. In the end, somehow I'm my own customer.
I would think it is good not to depend on your costomers, because if something ever happens to them, you be up a creek without a paddle. But I alos think it is important to treat them as if you need them, and that way they will want to keep comeing back to you for business.
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