Customer Concentration Risk Calculator
How much revenue from one customer is too much?
The share itself is only half the answer; what matters is what losing that customer does to your cash. Northwind Retail is 32.7% of the sample business's revenue. Losing it turns monthly profit into -$6,750, and the cash above the reserve lasts 5.6 months · 171 days.
Rules of thumb put a ceiling on how much of your revenue any one customer should bring. But the same share can be harmless in a business with a fat margin and deep cash, and fatal in one without. This calculator measures the share, the concentration of the whole customer base, and the only question that matters for survival: what happens if they leave.
Fail4 of the 4 customers listed could put you in the red on their own. Losing Northwind Retail (32.7%) leaves you 5.6 months · 171 days above the reserve.
| Largest customer's share | 32.7% | Northwind Retail |
|---|---|---|
| Top 3 customers' share | 60.6% | of total monthly revenue |
| Concentration index (HHI) | 1,544 | sum of squared shares of the customers listed, 0–10,000; higher means more concentrated |
| Monthly profit today | $900 | revenue × gross margin − other outflows |
| Customers whose loss alone puts you in the red | 4 of 4 | Northwind Retail, Harbor Clinics, Alder & Co, Kestrel Foods |
| Customer | Share | Monthly profit after | Runway to reserve |
|---|---|---|---|
| Northwind Retail | 32.7% | -$6,750 | 5.6 months · 171 days |
| Harbor Clinics | 16.4% | -$2,925 | 12.9 months · 395 days |
| Alder & Co | 11.5% | -$1,800 | 21.1 months · 642 days |
| Kestrel Foods | 8.7% | -$1,125 | 33.7 months · 1,027 days |
Runs in your browser with fixed, tested formulas — the same exact arithmetic as the Business X-Ray. Nothing you type is sent or stored.
One question answered. Eight more are waiting.
This page tests one thing with a few monthly numbers. The Business Decision X-Ray runs your whole business through the same engine, day by day: nine tests, the exact breakpoint, the smallest repair and a dated action plan. Open demo of every section, no sign-up.
How this calculator works
Each customer's share is their monthly revenue ÷ total monthly revenue. Anything you do not list counts as ‘everyone else’ — it is in the total but not in the table.
The concentration index is the Herfindahl–Hirschman index applied to your customers: square each listed customer's share in percent and add them up. One customer at 100% scores 10,000; a hundred equal customers score 100. It moves with the whole shape of the customer base, not just the top name.
Then the survival test. Losing a customer removes their gross profit — revenue × margin — while outflows stay. The table shows monthly profit after each loss and, if it turns negative, how long the cash above your reserve lasts.
The formula
Share = customer revenue ÷ total revenue.
HHI = Σ (share in %)², over the customers listed.
Profit after losing a customer = total revenue × margin − outflows − customer revenue × margin.
Worked example
The sample business's largest customer, Northwind Retail, brings 32.7% of revenue, and the top three bring 60.6%. With a thin monthly profit, 4 of the 4 customers listed would put it in the red on their own. Losing Northwind Retail leaves 5.6 months · 171 days above the reserve — the time available to replace that work.
Revenue share is not risk share
Two customers with the same revenue can carry different risk: one pays in 15 days, the other in 75. The longer-paying customer ties up more of your cash and can break payroll by paying late even while it stays. The Business X-Ray's Customer Dependency test weighs each customer by the cash they hold, not only the revenue they bring.
What this calculator does not do
- It assumes a lost customer's revenue disappears at once and nothing replaces it.
- Payment timing per customer is not modelled here; it is in the Business X-Ray.
- HHI covers only the customers you list.
Questions people ask
What is customer concentration risk?
The risk that losing one or a few customers seriously damages the business. It is usually measured as the largest customer's share of revenue, the top-5 share, or an index such as HHI.
What share is too high?
Lenders and buyers of businesses often ask about customer concentration, but there is no official threshold. The test on this page is more direct: if losing the customer puts you in the red, the share is too high for your current margin and cash.
Is HHI used for customers?
HHI was designed to measure market concentration. Applied to your own customers, it is a compact way to track whether revenue is spreading out or bunching up over time. Compare your own score over time rather than against a benchmark.
How do I reduce concentration?
Grow other customers, lengthen contracts with the big one, require deposits, or build enough cash that the loss is survivable. Change the numbers above to see how much each of those moves the runway.
Related decisions
- Payment Terms Cash Flow Calculator — What Net 60 or Net 90 does to your cash — before you agree to it.
- Sales Drop Calculator — How far sales can fall before you lose money — and before cash runs out.
- Cash Runway Calculator — How many months your cash lasts — now, with no sales, and if sales fall.
- Deal Safety Calculator — Whether a big order keeps your cash safe until the customer pays.
- How much revenue from one client is too much?
- What if my biggest client pays late? Net 30 to Net 60
Formulas reviewed 26 September 2026
