One customer is 40% of revenue. The discount lands on the structure, not the multiple.

Customer concentration rarely shows up as a lower headline price. It surfaces somewhere less visible, and it starts costing the business long before anyone thinks about selling.

By Steve 4 min read
Abstract bridge artwork for One customer is 40% of revenue. The discount lands on the structure, not the multiple.

A business with one customer at 40% of revenue is usually aware it has a concentration issue. What owners tend to underestimate is where the cost of that concentration actually appears. The assumption is that a buyer knocks a turn off the multiple and everyone moves on. In practice the headline multiple often survives negotiation almost intact, and the concentration gets priced into the shape of the deal instead: how much cash arrives at completion, how much is deferred, what it is contingent on, and how long the seller stays…

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Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

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