How do you avoid customer concentration?

There are a variety of factors that affect the value of a molding business and influence its ultimate selling price. One of the most significant is customer concentration; specifically, having one customer account for more than 30% of revenue. In general, having one client dominate the majority of any business presents increased risks and will lower the enterprise value. As an example, if Acme Plastics Corp. has a value of six times EBITDA, that same company with a customer concentration might sell for five times EBITDA or even less.
 
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