The year before a sale is too late to fix concentration

Moving one account from 40% of revenue to 25% is arithmetic, and the arithmetic runs on a timescale most owners only discover when a buyer asks.

By Steve 5 min read
Abstract bridge artwork for The year before a sale is too late to fix concentration

A familiar sequence: an owner starts thinking seriously about an exit, an adviser looks at the revenue schedule, and the conversation stops at one line. One customer is 40% of turnover. The owner takes the point and says, reasonably, that the plan for the next eighteen months is to diversify. What almost nobody does at that moment is the arithmetic on what diversifying actually requires. Take an illustrative business at £5m of revenue, with £2m of that from a single anchor account and £3m from everyone else. Suppose the aim…

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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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