Client Concentration Risk Calculator
Measure how dependent your revenue is on a single client — the concentration percentage, a plain-language risk rating and the revenue exposed if they leave.
How it works
Concentration % = largest client revenue ÷ total revenue × 100 · Equal-client equivalent = total ÷ largest client
Concentration risk measures how much of your income rides on one relationship. A common rule of thumb treats anything above 25% of revenue from a single client as a serious vulnerability, and above 50% as a business that is effectively one email away from a crisis. The equal-client equivalent — total revenue divided by the largest account — is a quick read on how diversified you really are: two or three means fragile, ten or more means resilient.
Worked example
If your biggest client bills $90,000 of $300,000 total revenue, concentration is 30% — a high rating. Losing them removes $90,000, and the equal-client equivalent of about 3 shows the whole book rests on very few relationships. Landing more mid-sized clients is the fix.
Frequently asked questions
What concentration level is dangerous?
Below 10% is comfortable, 10–25% is worth watching, and anything above 25% from one client is a red flag lenders and acquirers penalise heavily. Above 50%, the client effectively controls your business.
How do I reduce concentration risk?
Diversify deliberately: invest in sales while the big client is happy, productise a smaller offer to win many little accounts, and lock in longer contracts so any single departure is gradual rather than sudden.
Why do buyers care about this?
When valuing a business, a buyer discounts revenue that depends on one relationship because it could vanish post-sale. Lower concentration directly supports a higher multiple.
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Educational estimate, not financial advice.