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How Business Owners Can Mitigate The Risk Of Customer Concentration

To ensure your business is healthy and ready to sell, it is important to reduce customer concentration by

To ensure your business is healthy and ready to sell, it is important to reduce customer concentration by diversifying the client base.

It is a disadvantage when business owners focus all their energy on only their major customers.  To ensure a healthy mix of customers business owners should build relationships with current customers while seeking new customers. A general rule of customer mix is any customer over 10% of the business is too big.

A diversified client base is beneficial to scalability, valuation and maximizing cash received at closing.   Here’s an article that talks further about the mitigation of customer concentration:

 

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