Customer concentration measures how much of a business's revenue comes from its largest customers, and a high concentration, where one or a few customers make up a large share, is a risk buyers price into the deal. Losing one account matters far more to a buyer if that account is a third of revenue than if it is one of two hundred similar-sized clients.
Why it matters
A business that depends on a handful of customers is worth less to a buyer, no matter how strong its earnings look.