A significant portion of our revenue comes from three long-term customers who do not have formal contracts. How do we make these key relationships transferrable to a buyer without alienating our clients?

Question

Tyler Smith · Accepted Answer

Buyers view customer concentration as a major risk, especially when those relationships are held together by handshakes and personal ties to the owner. To secure a premium valuation, you must institutionalize these key accounts on your exit runway.

First, transition the daily management of these accounts away from yourself. Use your Accountability Chart to assign a dedicated account manager or relationship director who has the GWC to run the seat. This person should become the primary point of contact for all operational issues, leaving you to step back into a purely strategic role. Let the customer get used to working with your team, proving the business can retain them without you.

Second, look for opportunities to formalize these relationships with master service agreements (MSAs) or multi-year statements of work. Do not approach this defensively by demanding long-term commitments, which can spook clients. Instead, frame the transition as a way to provide them with greater predictability, dedicated capacity, or volume-based pricing.
- Focus the negotiation on mutual benefits, such as guaranteed service levels or priority scheduling.
- Ensure all contracts contain standard assignment clauses that allow the agreements to transfer automatically to a new owner upon a change of control.
- Document the exact delivery processes, specialized client requirements, and quality standards for these accounts within your core processes.

By showing a buyer that these accounts are managed by a capable team, governed by clean contracts, and executed through documented processes, you transform a concentration risk into an attractive, stable stream of recurring revenue.