FREE TOOL · HOW MUCH RIDES ON YOUR BIGGEST CLIENTS?
Free client concentration risk calculator
Paste your clients and their annual revenue to see how concentrated your income is, what you lose if the biggest client leaves and where you stand against your own limits.
Free. No sign-up. Runs in your browser: nothing you type is stored or sent.
Use the client concentration calculator
How concentrated your revenue is
Because largest client is 32.3% (limit 30%) and top 3 are 66.2% (limit 60%). The limits are your own rules of thumb, not benchmarks.
The concentration index (Herfindahl) adds up each client's share squared. 10,000 means one client pays for everything. Lower is more spread out. Your 1,866 is about the same as having 5.4 equal-sized clients.
What if the biggest client leaves
This uses revenue only. If the work has a high margin, the hit to profit can be larger, and fixed costs such as salaries do not fall by the same share.
Ranked clients
| Rank | Client | Revenue | Share | Cumulative |
|---|---|---|---|---|
| 1 | Northwind Logistics | $420,000 | 32.3% | 32.3% |
| 2 | Brightpath Health | $260,000 | 20% | 52.3% |
| 3 | Harbor & Finch | $180,000 | 13.8% | 66.2% |
| 4 | Cedar Mobility | $140,000 | 10.8% | 76.9% |
| 5 | Lumen Retail Group | $95,000 | 7.3% | 84.2% |
| 6 | Atlas Legal Partners | $70,000 | 5.4% | 89.6% |
| 7 | Fernhill Foods | $55,000 | 4.2% | 93.8% |
| 8 | Quartz Energy | $40,000 | 3.1% | 96.9% |
| 9 | Marlow Education | $25,000 | 1.9% | 98.8% |
| 10 | Oakridge Dental | $15,000 | 1.2% | 100% |
How to use this
- Use annual revenue per client for the same 12 months. Group sister companies under one name if one person decides for both.
- The thresholds are starting points. Change them to fit your cash buffer, contract lengths and how hard a client is to replace.
- Share of revenue is not the whole risk. A large client on a long contract with several sponsors is safer than a smaller one on a rolling month.
- Run it again with profit per client if you can. Nothing you enter is stored or sent.
How to use the client concentration calculator
- 01
Paste your clients
One per line: client name, then annual revenue. The prefilled list is fictional, so replace it with yours.
- 02
Set your limits
Edit the thresholds for the largest client and the top three. They are rules of thumb, so choose limits that fit your business.
- 03
Read the result
See top 1, 3 and 5 share, the concentration index, a ranked table and what a loss of the biggest client would cost. Copy it into your notes.
What is client concentration risk?
Client concentration risk is the danger that a large share of your revenue depends on a few clients. If one of them leaves, cuts scope or pays late, the whole business feels it. It is usually measured as the share of revenue from the top one, three or five clients, and sometimes with an index such as the Herfindahl index.
How to measure client concentration
Add up revenue per client for the same 12 months. Divide each client by the total to get its share. Then add the shares of the top one, top three and top five clients.
The ranked table with cumulative share shows how quickly revenue builds up as you go down the list. If three clients already make up most of the total, the tail matters less than those three relationships.
- Use revenue for one period, such as the last 12 months.
- Group companies under one name if one person makes the buying decision for all of them.
- Look at profit per client as well if you have it.
The concentration index in plain words
The Herfindahl index squares each client share and adds the results, on a scale from 0 to 10,000. A value of 10,000 means one client pays for everything. A low value means revenue is spread across many clients.
A simple way to read it: divide 10,000 by the index. The answer is how many equal-sized clients would give the same spread. A book of ten clients that feels like three equal clients is more exposed than the client count suggests.
Thresholds are a starting point
There is no single safe level of concentration. A firm with long contracts, a cash buffer and a fast sales pipeline can carry more concentration than one with monthly contracts and no reserve. The thresholds in this tool are rules of thumb that you can change.
Pick limits you would be comfortable defending to a bank, an investor or your own team, then review them when your contracts or cash position change.
What to do about it
High concentration is not always bad, but it calls for deliberate action. Give each large account a named owner, a plan and several contacts at the client. Agree renewal dates early and watch for silence.
In parallel, grow the rest of the book. Expanding smaller healthy accounts and winning new clients both lower the share of the biggest ones over time.
- Build a written plan for every account above your limit.
- Add contacts beyond the main sponsor.
- Track renewal dates for your top five clients.
- Keep a pipeline that could replace your largest client.
Frequently asked questions
What is client concentration risk?
It is the risk that too much of your revenue comes from a few clients, so losing one of them would hurt the business badly.
How do you calculate client concentration?
Divide each client's revenue by total revenue, then add up the shares of the top one, three and five clients. A concentration index such as Herfindahl adds up the squared shares.
What is a safe level of client concentration?
There is no universal number. It depends on contract length, cash reserves and how fast you can replace revenue. Treat any threshold as a rule of thumb and set your own.
What is the Herfindahl index?
It squares each client's share of revenue and adds them up, from 0 to 10,000. Higher means revenue is more concentrated in fewer clients.
Is the client concentration calculator free?
Yes. It is free, needs no account and runs in your browser. Nothing you enter is stored or sent.