Client concentration

How much of the revenue depends on a few customers. High concentration is priced as risk by buyers: if two clients are 40 percent of revenue, their goodbye is the buyer's problem.

Concentration is measured simply: what share of revenue comes from the top one, top five, and top ten customers? For consumer businesses (salons, cafes) it is rarely an issue; for anything with business clients, contracts, or big regulars it can quietly become the dominant risk in the company.

Buyers discount for it directly, because customer loyalty to a departed owner is untested loyalty, and a single defection could erase the deal's economics. Common thresholds of concern start around any single client above 15 to 20 percent of revenue.

The fix is deliberate diversification (widening the base, contracting key relationships to the BUSINESS, and never staffing a single relationship with a single person), tracked as part of exit readiness.