For many business owners, their largest customers represent years of hard work, strong relationships, and reliable revenue. But when one or a few customers account for a disproportionate share of your company's income, that success can become a liability.
Customer concentration is one of the most common and overlooked risks business owners face when heading into a sale. Buyers scrutinize it closely, and even modest levels of concentration can reduce your company's valuation and limit the pool of interested buyers. Many owners don't start addressing the problem until it's too late and underestimate how severely it can impact their options.
This white paper explains what customer concentration is, why it occurs, and how buyers evaluate it. It also outlines practical steps owners can take to reduce concentration risk and how to present it in the most favorable light when it can't be fully resolved.
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