“Customer concentration.” We get it! Perhaps you started your business with one customer, continued the relationship, and you’re doing your best to grow with it. Maybe you’ve been fortunate to pick up a few new customers along the way. Customer concentration is a considerable risk for all those reasons that keep you awake at night worrying about losing a key customer.
Buyers see the same risk, but it’s even more significant in their minds. For instance, potential buyers have no relationship or feelings toward those key customers; therefore, companies with a high customer concentration will sell for a significant discount with a lot of risk-sharing in the deal structure.
Strategies to Diversify Customer Concentration:
Strategies if Customer Concentration is Unavoidable:
If you are interested in learning more about ACT’s sell-side services, use the following links: