What do you do when your customer who accounts for 33% of your revenue declares insolvency ?

Question

There is a product say SP-100 for which A is the exclusive customer. A contributes to 33 % of my business revenue. The delivery of order from A is due in 6 months. Now A has declared insolvency. What do I do now ? Rip off A and recover money or give him some time for recovery and do a bit of gamble ?

Answer 1

Call "A" and explain to your contact your concerns given their current state of insolvency.  Explain that you can not let their issues become an issue for you financially.

They will tell you:

1) The insolvency is permenant and they will be going out of business.  At this point you can terminate your contract given the new information.

2) the insolvency is temporary and would like you to continue with the order.  At this point - push to alter the contract to force a partial payment plan on their part.

If your relationship with "A" is as good as it "should be" then they will respect your position and openess to discussing it.  They may have other suppliers that have already ditched them.  

And find other ways to attract clients - stop putting all your eggs in one basket.