Revenue dependence on top clients. The Customer Concentration Risk Calculator takes revenue from your largest customer, revenue from your five largest customers, total revenue and returns largest customer share plus top five share, risk reading. Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
Good business decisions come from putting numbers on the options before committing. Run the calculation with your best estimate, then again with a pessimistic one, and see whether the decision survives both. Use the worked example below to check the maths against your own figures.
How the Customer Concentration Risk Calculator works
Lenders and buyers of businesses discount heavily when one customer exceeds 20–25% of revenue. The remedy is not to lose the customer but to grow the others.
Worked example
With the example values (revenue from your largest customer of $300,000, revenue from your five largest customers of $700,000, total revenue of $1,000,000), the largest customer share is 30%; top five share 70%, risk reading High risk: one customer is over 25% of revenue. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
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Frequently Asked Questions
How is largest customer share calculated?
concentration = revenue from the customer ÷ total revenue.
Which figures do I need?
Revenue from your largest customer, revenue from your five largest customers, total revenue. Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
How reliable is the result?
As reliable as the estimates you enter. Run the calculation with optimistic and pessimistic inputs to see the range of outcomes before deciding.
