EPISODE 226. This episode begins with the vocal stylings of Ashley Battel from the Revenue Rocket Outreach team.

EPISODE NOTES:

• Customer concentration in IT‑services M&A is it a hero or risk? 

• Concentrations of 20–50%+ revenue across 1–5 anchor clients are common. 

• Evaluate revenue/profit trajectory, contract history, and relationship depth to size risk. 

• Strategic buyers often welcome concentration for cross‑sell upside; financial buyers discount or structure.

 • Deal mechanisms (earn‑outs, hold‑backs, gain‑share “circuit breakers”) protect all parties if the key client churns. 

• Valuation impact: risk is typically offset with structure rather than outright price cuts. 

• Pre‑sale de‑risking: broaden touchpoints, add contract vehicles, and build succession around the anchor client. 

• Diversification upside: the right acquirer may reduce their own concentration and grow wallet share. 

• Bottom line: understand the full picture, concentration can fuel growth instead of derailing deals.

RELATED EPISODES:

• Episode 210: What Should My Company look like to Command a Premium Offer. Listen now >>
• Episode 186: Dealing with Customer Concentration when Selling your Business. Listen now >>
• Episode 182: Prioritizing Marketing in Tech Services Firms feat. Mark Coronna. Listen now >>
• Episode 170: How to Become a Platform Investment. Listen now >>

Listen to Shoot the Moon on Apple Podcasts or Spotify.

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