Revenue concentration
Also known as Customer concentration risk
Revenue concentration is the share of total revenue coming from a single customer, and it measures how exposed a business is to losing one account.
Above 30 percent from one customer is commonly treated as a material risk in diligence.
Concentration turns recurring revenue into conditional revenue. The contract may be signed, but the company's survival now depends on a decision made inside someone else's business.
It is worth computing before it becomes urgent, because the remedies, spreading revenue or lengthening contracts, take quarters rather than weeks.
Keep this number live
Plainhub computes revenue concentration from money you record in plain words, so it is current when you need it rather than the night before a board meeting.
Build your model