088 | How One Founder Lost a $1.2M Business & What AI Could Have Done To Save It

 You hit $1.2M in revenue — but $840K comes from one client. One contract. One decision maker. One email away from unraveling everything. 

If more than half your revenue depends on a single client, you’re not free — you’re trapped in golden handcuffs. 

This episode isn’t about losing your biggest client — it’s about building a business where no single client holds your future hostage. With AI as your strategic partner, you can finally protect your revenue, diversify your client base, and scale without starting from scratch.

In this episode, you’ll learn…

• Why having 70% of your revenue tied to one client is more dangerous than having none at all (and the real story that proves it).
• My AI-powered, 3-phase diversification plan to reduce dependency without blowing up your business.
• How to use AI prompts to audit your revenue, find mirror clients, and build scalable systems that protect your future.

This episode at a glance:

“Client concentration above 50% isn’t success. It’s a warning sign.”

“The better your biggest client treats you, the more trapped you become.”

“AI isn’t just efficiency — it’s your risk management system.”

“Your talent doesn’t belong to one client. Protect it with systems that let you grow on your terms.”

“The key to diversification isn’t just finding new clients. It’s building systems so you don’t get trapped again.”

Resources and links mentioned in this episode:

• Free Culture Audit Call
• Join the AI for Founders Community
• 10 Ways AI Will Make You a Better Leader – Free Guide

Want to increase revenue and impact? Listen to “She's That Founder” for insights on business strategy and female leadership to scale your business. Each episode offers advice on effective communication, team building, and management. Learn to master routines and systems to boost productivity and prevent burnout. Our delegation tips and business consulting will advance your executive leadership skills and presence.

Transcript

She's That Founder
088 | How One Founder Lost a $1.2M Business & What AI Could Have Done To Save It

Picture this scenario. You just hit seven figures $1.2 million. To be exact. You should be celebrating popping champagne, maybe taking that vacation you've been promising yourself for two years. But instead, you're lying awake at 3:00 AM in a cold sweat because $840,000 of that revenue came from just one client, one contract, one decision maker who could change everything with a single email. 

If you're nodding along and thinking, that's exactly my situation. Or if you've got 60% or more of your revenue tied to one or two clients, this episode is your step-by-step escape plan. Because here's what I've learned, working with hundreds of female founders, the bigger that one client gets, the smaller your world becomes. 

You're listening to she's That founder, the podcast that helps ambitious women stop drowning in decisions and start owning their CEO seat with a little AI magic. I'm Dawn Andrews, and today we're talking about the client concentration crisis that's keeping you trapped in your own success by the end of this episode, you'll walk away with three key things. 

First, why having 70% of your revenue from one client is actually more dangerous than having no clients at all? And I'll share the real story that proves it.

Second, you'll get my AI powered three phase diversification plan that could have saved a brilliant founder's business if these tools had existed then. 

And third, how to use AI to identify and attract your next ideal client without starting from scratch or breaking any NDAs with your current big client.

This isn't just theory, it's the strategic framework. I wish I could have given a talented founder who lost everything she couldn't replicate herself to build the systems that would've protected her business.

Let me tell you about a founder I wish I could go back and coach now that AI is in existence. I've completely anonymized her story to  protect her privacy, but the lessons are too important not to share. 

This brilliant creative, had built what looked like the entrepreneurial dream. A seven-figure business specializing in content creation and high-end fashion photography for major retail brands. Her biggest client was a massive international fashion retailer, think global scale, thousands of stores worldwide. She'd landed an incredible contract with them, high six figures annually, steady creative work, and the kind of prestige that opened doors throughout the fashion industry.

But here's what she didn't see coming. This retail giant wasn't just her best client. They represented 70% of her entire business revenue. Every time they had a campaign launch, she would drop everything. She'd restructure her team's schedule, put smaller clients on hold, work weekends, and pour all her creative energy into making them happy.

And why wouldn't she? They were paying her seven figures over three years. The problem was this left her completely dependent on referrals for new business, and she was so busy servicing this major client that she couldn't invest time in building her own client acquisition systems. She kept telling herself, after this campaign, I'll focus on marketing. After this deadline, I'll diversify. 

Then the inevitable happened. When her three year contract came up for renewal, they offered her a two year extension. At 40% less revenue. Budget adjustments. They said strategic shifts. She was devastated, but she took it because she didn't have alternatives lined up.

Here's where she made the mistake that ultimately led to the end of her business. Instead of accepting this new reality and immediately pivoting to find new clients, she spent the next 18 months trying to convince them to increase her contract again and wouldn't we all? In times like that, I have so, so, so much empathy.

She created proposal after proposal, pitched new services even offered to work for less, just to maintain the relationship. And when that two year contract ended, they offered her just a 12 month agreement with no revenue guarantee. Essentially project based work. Her seven figure business had become a $300,000 uncertainty.

Between the financial stress and some personal challenges happening simultaneously. She ultimately made the difficult decision to close her business and leave the industry entirely. 

This is the story of what could have been different if she had access to AI powered business strategy at the time.

Her story illustrates what I call the golden handcuffs paradox, and the statistics around this are more alarming than most female founders realize. Of the roughly 14 and a half million women owned businesses in 2024, at least 13 million of them operate as solopreneurs or small teams, mostly in service sectors.

And about 62% of women entrepreneurs depend on their business as their primary income source. But here's what makes me a little nauseous. Industry surveys show that between 20 and 35% of solopreneur service firms have one client providing more than half their revenue, especially early in the business life cycle.

So if you're in the early stages of growing your business, you probably popped out corporate and retained your corporate client to start your business, which is fantastic. But it's tough if that's where the majority of your revenue's coming from. And like I said, my client wasn't an outlier. She was part of a massive under discussed crisis.

And the better your biggest client treats you, the more trapped you become. 

When one client represents most of your revenue, you literally can't afford to have boundaries. She found herself saying yes to impossible timelines, endless revisions, and massive scope creep, because saying no felt like business suicide.

But here's what's really insidious about this situation. It kills your growth potential in ways that you don't even realize. She was so focused on keeping her major client happy, that she never built the marketing systems, the team capacity or the operational structure that could have protected her.

She  became a high paid vendor instead of a strategic CEO. So this is where AI becomes your reality check and your strategic partner. God, I so wish I could turn back the clock and have this conversation now. 

So I now have all my clients use AI to run what I call a concentration audit. And some of you could probably look at your books and tell me right off the top of your head, you don't even need AI to do it.

But this is the exact prompt that I wish she had been able to use years earlier. "Analyze my client revenue data for the past three years. Calculate revenue, concentration, risk, and show me three scenarios if I lost my top client, if I lost my top two clients, and if my biggest client reduced their contract by 50%, include recommended diversification targets and a timeline to achieve them."

So when I ran this analysis using our situation as a case study after the fact, the results were sobering. Losing her major retail client was like losing 23, smaller $30,000 clients all at once, something that would've been mathematically impossible to replace quickly.

And the AI analysis also showed that even a 25% reduction from that client would have required her to land six new clients immediately just to maintain cash flow. You get how big of a deal this is, right? 

So here's the good news. You don't have to blow up your business or fire your best clients to fix this.

Please don't do that. The key is strategic diversification that protects existing revenue while building new revenue streams. It's the oxygen mask strategy. You need to secure your own foundation first and then help others. 

So imagine us working together over a six month timeframe perhaps.

Phase one is about revenue insurance, and we do that in the first two months, this isn't about replacing your big clients immediately. It's about reducing the percentage they represent. So we would use AI to analyze your pipeline, identify which smaller opportunities you've been ignoring because you were focused on your big whale client, and here's a prompt that might change everything for you.

Based on my current client roster and past project history, identify 5 to 10 smaller project opportunities I might be overlooking. Show me the revenue potential if I secured three to five of these monthly. She realized she'd been turning down 25,000 to $50,000 projects because she was chasing $500,000 ones, and I mean, amen to that. Who doesn't want those bigger projects? But we do need a little diversification when you are, you know, a small business. 

So five $50,000 projects would've given her 250 K in revenue with a distributed risk and a distributed service timeline. So more importantly, these smaller clients would often lead to bigger opportunities and referrals. So the diversification's not just about the cash, it's about the growing of your strategic network. 

So phase two, what we do in months three and four is finding your mirror clients, your mirror clients, companies that look like your best client but aren't your best client. 

And this is where AI can really shine because it can analyze patterns that you just can't spot manually, and you probably don't have the time to do yourself. Don't have the expertise to do yourself or don't have the cash to hire somebody to do. 

So a prompt that she could have used here would be. "Analyze my major client's business model, target market, campaign frequency and budget range, and she would have that information from working with them and then identify 15 to 20 similar fashion brands that would need similar creative services include their typical marketing budgets, and recent campaign activity."

Within 48 hours, she could have had a list of 18 brands, including companies like Reformation, Everlane, or emerging sustainable fashion companies. And the AI would've analyzed their social media activity, their recent campaigns, even job postings for creative roles, giving her the perfect intel for targeted outreach.

Can you see just how much work would have been required to turn the Titanic that was her business pre ai, and how little work now is required to gather all the intel that you need to start hitting the ground running. 

So the last phase of the project, months five and six, is where we make some scalable shifts in your operations. This is where phase three is where you stop being a bottleneck in your own business, and this was the critical piece that she was missing. 

Her major client wasn't just taking up 70% of her revenue. They were consuming 90% of her time because she was personally handling everything. She couldn't replicate herself to continue marketing while serving her big client.

And if AI had been available, then we could have tackled three critical areas.

 First, reducing administrative overhead. Here's a cool prompt "List the administrative tasks that typically consume two plus hours weekly for a creative agency owner for each task suggest AI tools or delegation strategies to reduce time investment by 75%."

So AI could have helped her identify that client communications, project updates, and scheduling. Were eating 12 plus hours of her week. And with AI created templates and automation, her team could have managed those independently. 

Secondly, we would create AI powered SOPs for every aspect of her business. So instead of her being the only person who knew how to manage high-end retail campaigns. Her team could have had step-by-step procedures to follow independently. And a prompt that I might have used here would be "Create a detailed SOP for managing large scale fashion campaigns, including pre-production execution and post-production workflows. Include quality checkpoints and client communication templates". 

But the game changer would have been the third piece. Create a recurring marketing strategy that ran without her. The prompt here would be, "Analyze successful acquisition, analyze successful client acquisition patterns for creative agencies. Create a systematic 90 day marketing plan that a team can execute while the founder focuses on client delivery"  

And that's just the beginning of the conversation. So AI could have identified that her best clients came from industry relationships, portfolio showcases, and strategic networking, a system of weekly content creation, monthly case study releases, and quarterly event participation. 

And she could have created a system of weekly content creation, monthly case study releases and quarterly industry event participation. All with AI generated templates Her team could execute while she focused on what she did best and had done it in her voice and her style. 

So, I'm imagining sitting, you know, doing like a fireside chat with this founder and suggesting what if you got back in the game?

And I would share with her how to use AI to attract new clients without starting over. The biggest fear that I hear is if I diversify, I'll have to start from scratch With marketing, I don't have time to build a whole new brand. 

Not true AI helps you leverage everything you've already built. 

Here's my favorite strategy. Use AI to analyze all the work you've done for your major clients. I have literally done this for myself on multiple occasions over the last several years since AI has been part of our lives. Case studies, creative approaches, even internal processes, and extract the patterns that made you successful.

The prompt she could have used is "Analyze my portfolio of work for my major retail client over three years, identify the key success factors, creative approaches and client outcomes that could be replicated for similar brands. Create messaging templates that showcase my methodology without revealing confidential information."

Right? Yes, that's what I'm talking about. So. If she'd had access to AI and AI strategy, she could have discovered that her best campaigns happened when retailers were launching new seasonal collections. They needed everything from concept development to execution. And armed with that insight, she could have created content specifically targeting retailers in similar launch phases.

And here's a prompt for that. "Create 10 LinkedIn posts targeting fashion retail executives, preparing for seasonal launches. Focus on the strategic and creative challenges that they face, and position me as the expert who solves these specific problems." 

With the right a with the right AI powered approach, she could have been booking $200,000 plus in new business potentially within months. All from companies that looked exactly like her major client, but she would have diversified her risk completely.

So if you're realizing you could be in a similar situation, or you're tracking that way and wanna see exactly how AI could help you as a leader. Grab my report, 10 Ways AI will make you a better leader. It includes other prompts that could have saved this founder's business. Some of the tools for client analysis, pipeline building and strategic planning that I wish had existed back then.

So let's recap what we covered today because this framework could literally save your business if your client concentration is above 50%. Client concentration above 50% isn't a sign of success. It's a warning sign. As she learned the hard way when her $1.2 [00:15:00] million business dropped to $300,000 overnight.

The three phase AI diversification plan gives you a roadmap to reduce risk without destroying revenue. Revenue insurance to reduce dependency percentages, A mirror client strategy to find similar high value clients and scalable operations to remove yourself as the bottleneck. The key to real diversification isn't just finding new clients.

It's building systems so you can serve them without becoming trapped again. So your action steps this week. 

First, run your own concentration audit. And here's your AI prompt. "Analyze my client revenue data for the past two or three years. Calculate what percentage each client represents of my total revenue. Show me the risk scenarios if I lost my top client, or if they reduced their contract by 50%. Include recommended diversification targets."

Second, start identifying smaller opportunities you've been overlooking and use this prompt. "Based on my current client roster and expertise, what types of smaller projects or clients should I consider to reduce concentration risk? Show me the revenue, potential, and time investment for each."

 And third, begin your operations audit with this prompt "List the administrative and operational task that consume two plus hours each week for someone in my industry, for each task suggest AI tools or delegation strategies to reduce my personal time investment by 75%."

We have just worked over your business with three powerful AI prompts that can give you the diversification that makes sure that your business supports you consistently for a very long time. And remember that AI can give you insights, but strategy is always what turns insights into results.

So the goal incident to fire your best clients is to build a business where no single client holds your future hostage, and you're not the only person who can deliver excellent results. 

So download 10 ways AI will make you a better leader. At hellodawn.live/AI10Ways to get more AI tools that will help you build a more resilient strategic business.

Because the difference between her crisis and what could have been her comeback wasn't luck. It was having the right strategy and tools to implement it systematically. 

Ooh, you know. When I think about the founder in today's story, first of all, I wish I could go back and hug the crap out of her, and I wish I could go back and tell her that her value wasn't tied to one client's opinion of her work.

That brilliant creative mind, that ability to bring a brand's vision to life, that gift she had for understanding what retailers needed before they even knew it themselves. None of that disappeared when her contract ended. 

What she needed wasn't to work harder or beg for validation from someone else's budget meeting. She needed systems that honored her talent while protecting her future. 

If you're listening to this and feeling that knot in your stomach, that recognition of your own golden handcuffs, I want you to know something. Your creativity, your expertise, your ability to solve problems that keep your clients up at night. These things don't belong to one client. They belong to you, and with the right strategy and tools, you get to decide how to share them with the world. 

Remember, you're not just building a business, you're building a legacy that can't be canceled by someone else's contract renewal meeting.

I will see you next Tuesday on. She's That founder. Take care Lovie.