What if one customer represents a large percentage of the business?
Category:
Buying a Business
Customer concentration is an important consideration during the evaluation process. If a significant portion of revenue depends on one customer, buyers should understand the nature of that relationship, the length of the agreement, and the potential impact if that customer were to leave.
Diversified customer relationships often reduce business risk, while heavy dependence on a single customer may require additional evaluation.
Understanding customer concentration helps buyers make more informed decisions.
