When Your Best Customer Becomes a Concentration Risk

Landing a big customer feels like a win. But what happens when that customer grows into 30% of your revenue? In this episode of Moore on Manufacturing, Mike Sibley and Kevin Golden explain when a great customer turns into a concentration risk and what you can do about it.

They talk about why lenders and buyers start asking questions once one customer passes about 10% of revenue, and why contribution margin by customer tells you more than sales volume. They also cover how large customers push for price cuts and longer payment terms, and how budgeting, forecasting and cash flow modeling help you prepare. Finally, Mike shares how heavy concentration can lead buyers to discount the price of your business, and how to grow the rest of your customer base without turning away good work.

Learn more about the James Moore Manufacturing Team.