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Multiple Clients Create Your Independent Business
By J. Stephen Pope
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 good
reasons 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 one
major 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 of
you. They can get away with it because they know you are
in a very poor bargaining position.
You could also end up losing a good client for reasons
beyond your (or even their) control. Bankruptcy, sale or
bequest of the business to someone else, or a new manager
who has made other arrangements are just a few ways you
can lose such a client.
You are much better off to have several clients. If you
lose 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 over
being employed. Although there are other factors to
consider in making this determination, the more clients
you have, the less likely that you will be classified by
the 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 (or
even your own), a case could be made that you have two
different 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 clarify
your self-employed tax status, choose several clients over
just one or two clients. For increased success and to be
a truly independent business, obtain multiple clients.
About the author:
RESOURCE BOX:
J. Stephen Pope, President of Pope Consulting Inc., has been helping clients to earn maximum business profits for over twenty-five years.