How Our Company Bounced Back From a Failed Client Engagement



In the summer of 2014, my company was doing great work with a large client engagement. Our team was excited, the client was happy and our account was growing. Everything was going smoothly. As the months ticked on, the client was incrementally making up a disproportionate chunk of our revenue. In the past, as president and co-founder, it has been my role to protect the company, which I did by never allowing a client to make up more than 20 percent of our total revenue. In this particular case we got caught up in the excitement of this new and fast relationship, and we allowed the client to grow far beyond our comfort zone.

The Build Up

In the fall our team started talking with C-level executives about a long-term, multiyear engagement between our 2 companies. The client started the conversation and spoke about how excited they were to engage with us. Given the size and seeming security of the opportunity, I decided to make hiring decisions in advance of signatures. Regretfully, I skipped on pursuing other opportunities because we felt this deal was going to happen.

We submitted our proposal in early November with the expectation that approval would come in a few weeks — but then it did not. After 15-plus years doing business, I know that silence is never good. The weeks dragged on and we had minimal to zero response from our typically chatty client. My team was ready to move; however, the client’s board of directors met in late January and decided to freeze all vendor work for the next year because of poor financial performance within the organization. 

So I was left with my dream team now facing the opposite scenario of what we had expected. We had been on top of the world, but now had a very weak pipeline and too many employees for our weakened revenue stream. After many sleepless nights and high blood pressure readings, I made the gut-wrenching decision to cut the team.

The Fall and Lessons Learned

A few team members had worked with us for 4-plus years, and they lost their jobs because of my inability to mitigate risk and protect our revenue. It was a tough period. Looking back, I would have tried to tackle this differently by creating a bridge contract to the multiyear deal. The bridge contract would cover the hiring effort to staff up the team and bring them up to speed on the account in anticipation of locking in on some form of multiyear deal.

Ultimately, our team leaned out after the cuts and we removed any expenses that were unnecessary. We sublet our office and moved to a smaller space, and the team tackled RFPs and went after any opportunities that came our way. We used freelancers to augment our full-time staff. After about four months, the tide started to turn and our pipeline regained its strength. We started hiring again and found a great new office that really expressed the attitude and identity of the company.

I would never wish this experience on anyone, but as many other entrepreneurs told me, “If you are in business long enough, you will go through times like this.” Luckily, all of the team members I cut are happily working at new companies, and my new team is hungry and focused.

In order to ensure something like this never happens again, I have delegated the operational aspects of the company to the wider team of directors, so now we have a better way to forecast risk balanced with opportunity. Going forward, I will not be making hiring decisions or intentionally pulling back on sales without a signed contract in hand.




The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

Image credit: CC by 24oranges.nl

About the author: George Morris

George Morris is President of The FRAMEWORK, co-founder of TEDxBoulder and Colorado Chapter President for the Entrepreneurs Organization.

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