We have a highly profitable business, but our client concentration is high, with one customer representing forty percent of our revenue. How do we restructure our Accountability Chart and sales Rocks over the next three years to systematically dilute this risk before we go to market?

Question

Tyler Smith · Accepted Answer

High client concentration is a massive valuation drag that will cause any sophisticated buyer to heavily discount your price or demand an aggressive earn-out. To solve this over the next three years, you must treat revenue diversification as a critical operational priority. Start by looking at your Accountability Chart. If your current sales team is comfortable managing your existing large account, they will not have the hunger to hunt for new business. You must split your sales seat. Create one seat for account management, focused on keeping your key client happy, and another seat dedicated entirely to new business acquisition. Ensure the person in the new business seat GWC the role. Next, set specific, quarterly sales Rocks for your leadership team that are focused solely on bringing in mid-sized clients. Your weekly Scorecard must track active outreach to these new targets. By systematically shifting your team's energy toward customer acquisition and tracking their progress in your weekly Level 10 Meetings, you will steadily dilute your top client's share of your total revenue. When you go to market in three years with no single customer representing more than fifteen percent of your business, you will command a premium multiple.