Fiducia TogetherConcentration risk
Too much of your revenue, supply or funding depending on one thing.
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.
What it means
Concentration risk is exposure to a single customer, supplier, channel, platform or funder whose loss would materially damage the business.
Why it matters
It is the risk that most often turns a good business into a failed one, and it is invisible while everything works.
What it looks like in practice
Measure it: what percentage of revenue comes from the largest customer, and from the largest three? Above about a quarter from one customer is worth actively managing.
What to watch out for
Buyers and lenders both price it. A business with one customer at 60% of revenue is worth materially less, and the discount is not negotiable.
Where to get proper advice
Your own sales analysis by customer, which most businesses have never run.
Where to read more
Last reviewed 2026-08-28 by Fiducia Together · Next review due 2027-08-28
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.