Multiple Clients Create Your Independent Business

Would you rather have one good client paying you five nthousand dollars per month or ten smaller clients paying nyou five hundred dollars each per month? Here are two good nreasons 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 nmajor client and lose them, you have zero income overnight.

Knowing that they are your sole (or main) source of income, nsome clients will make some unfair, unreasonable demands of nyou. They can get away with it because they know you are nin a very poor bargaining position.

You could also end up losing a good client for reasons nbeyond your (or even their) control. Bankruptcy, sale or nbequest of the business to someone else, or a new manager nwho has made other arrangements are just a few ways you ncan lose such a client.

You are much better off to have several clients. If you nlose a client that represents ten percent of your income, nyou still have ninety percent of your income left.

2. Clarify Your Self-Employed Status

Self-employment status has certain tax advantages over nbeing employed. Although there are other factors to nconsider in making this determination, the more clients nyou have, the less likely that you will be classified by nthe tax authorities as being an employee.

For example, if you do all your work for one client at his noffice, a good case could be made that you are his employee.
If you work for two different clients at their offices (or neven your own), a case could be made that you have two ndifferent part-time jobs.

On the other hand, if you have a hundred different clients nyou work for, it is unlikely that anyone would argue that nyou have one hundred part-time jobs.

So, to avoid dependence on any one client and to clarify nyour self-employed tax status, choose several clients over njust one or two clients. For increased success and to be na truly independent business, obtain multiple clients.