Over 350,000 small firms rely on a single client for more than 75% of their turnover, according to research by Close Invoice Finance.

Small companies are being advised to protect themselves by diversifying their client base. The research also found that a third of small businesses do not have insurance against customers defaulting on payment.

"By relying heavily on one single customer, companies put themselves at serious risk of business failure should this customer fall into financial difficulty,” said David Thomson, chief executive officer of Close Invoice Finance.

“Simply put, this means one company's financial downfall can mean bad debt has a domino effect and will precipitate another business' collapse."