Mergers & Acquisitions

Resources: Glossary

Don’t be confused or intimidated by any terms or abbreviations in the M&A world. You’ll find answers here.

Customer Concentration

Definition

The degree to which a customer or group of customers accounts for a percentage of a company’s total sales.

Tips

Customer concentration risk can be calculated by dividing the revenue from a business’s top customer by the total gross revenue of the business in a year. Buyers see businesses that have high customer concentration as riskier and therefore place a lower value on these businesses.

Related Resources

Reducing Concentrations of Risk Before Selling Your Business