Selling your Business
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Customer Due Diligence
Buyers conduct customer due diligence to understand the level of risk that lives in your customer base. Things that raise alarm bells amongst buyers are when a disproportionate amount of revenue comes from a small percentage of customers.
If 80% or more of your sales comes from less than 20% of your customers then that’s going to cause concern amongst investors. That concern can be mitigated if your relationships are strong, but you’ll need to be prepared to explain why this isn’t something that an investor should be unduly worried about.