Revenue Concentration
The percentage of total revenue attributable to a single client or customer, a key indicator of dependency risk.
What is Revenue Concentration?
Revenue concentration measures how much of your total revenue depends on one client. If Client A represents 45% of monthly revenue, your concentration for that client is 45%.
High concentration is common in early-stage businesses but creates fragility. A delayed payment, churned contract, or renegotiated deal from a large client can destabilize payroll and runway overnight.
Concentration risk is nonlinear. Moving from 20% to 40% concentration more than doubles your exposure. Above 50%, a single client delay can threaten operations regardless of overall profitability.
Why it matters
Profitable businesses fail when one large client pays late or leaves. Concentration risk does not appear on a standard P&L until the problem arrives.
Tracking concentration per client lets you diversify proactively, set internal payment alerts, and negotiate terms before dependency becomes existential.
Example
Three clients generate $80K monthly revenue: Client A $44K (55%), Client B $24K (30%), Client C $12K (15%). Client A pays Net-45 but historically takes 58 days. A two-week delay on Client A alone threatens payroll.
How RunwayCal helps
RunwayCal calculates revenue concentration per client and factors it into deal risk scoring alongside collection speed and outstanding amounts.
Common mistakes
- 1Measuring concentration annually instead of monthly as client mix shifts
- 2Ignoring concentration because the relationship feels stable
- 3Not combining concentration with collection speed
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Know your client concentration risk
RunwayCal shows revenue concentration per client and flags high-risk dependencies automatically.
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