Two customers are 48% of revenue. Both can leave on thirty days’ notice.

Concentration is the number everyone quotes at board meetings. The notice period is the number that decides what that concentration actually costs.

By Steve 5 min read
Abstract bridge artwork for Two customers are 48% of revenue. Both can leave on thirty days’ notice.

Customer concentration is usually discussed as a growth problem. The business depends on too few accounts, so the answer is more accounts. That framing is comfortable because the remedy is familiar: sell more, to more people, and the percentage falls. It is also usually wrong about where the risk sits. Consider two businesses with identical concentration: two customers, 48% of revenue between them. In the first, both accounts sit on three-year agreements with twelve months’ notice, the service is wired into the customer’s own workflow, and four people on the…

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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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