Milwaukee Business Brokers Hub connects owners with a business valuation partner. Before that conversation, consider how to review Customer Concentration Before Selling Your Business.
Measure the Relationship More Than One Way
Look at revenue by customer across several periods. Then compare gross margin, payment history and the team effort needed to serve those accounts.
Check whether several buyers share a parent company or purchasing group. The account list may appear diversified while the decisions still come from one place.
Separate repeat orders from signed commitments. Historical loyalty does not guarantee that a customer will keep buying after an ownership change.
If the largest customer reduced orders, what would happen to earnings and the buyer's ability to service acquisition debt?
Prepare Evidence Rather Than a Promise
Review contract terms with your attorney, including assignment and termination provisions. Identify customer approvals that could affect closing or the transition.
Show who manages each major account. Relationships supported by several employees and documented procedures may be easier to hand over than those held only by the owner.
Discuss the risk early with your advisor. A buyer may address uncertainty through price, deal terms or additional diligence. No single percentage determines the outcome for every company.