The seller brief is selling with customer concentration. The pricing sibling is how concentration affects value. The buyer extract is analyzing customer concentration and backlog. The timing fork is sell now versus fix concentration first.
How does this teaching table work?
There is no JavaScript. The spec at /calculators/customer-concentration-discount-calculator.spec.json lists inputs and a habit map. A future widget must print “habit, not statute” on every output. It must refuse a per-point slope.
Step 1. Roll related legal entities into one buying group. Eighteen plus sixteen is thirty-four when they share a treasury.
Step 2. Enter trailing-twelve and trailing-thirty-six sales percentages. A new 40% account is a spike. A decade-long 40% account is a dependency.
Step 3. Enter gross-profit share if the job-cost file can produce it. A 28% revenue customer at 8% GP is not the same risk as a 28% customer at 42% GP.
Step 4. Read the habit row. Do not treat the chip as a quote.
Step 5. Choose structure if the metric is auditable. Earn-outs in manufacturing deals wants named-account GP, not EBITDA after allocations.
What habit table does this page teach?
Label: broker rules of thumb, not a statute and not a 2% per-point law.
| Top-account share (rolled-up T12 sales) | Habit conversation this worksheet teaches | What it is not |
|---|---|---|
| Under ~15%, next names healthy | Usually stays inside the size-band cell | A promise of no diligence |
| ~15–25%, GP not the worst in the book | Watch the next three names; read termination | A free pass |
| ~25–30% | Start talking 0.5–1.5x multiple chip, earn-out, escrow, or walk | A legal trigger |
| ~30–40% | Structure the whale or accept a deeper chip | Automatic unsellable |
| Above ~40% | Many rooms walk or buy only the remainder | A formula you can multiply by 2% |
| Any share, cancel-for-convenience, 30-day out | Haircut the “recurring” story | An LTA that erased risk |
| Any share, related-party whale | Normalize rent/scrap; disclose; price three problems | “Sticky loyalty” |
Jason Taken will not invent a safe percentage. HedgeStone will help you show T12 and T36 without names until an NDA. Manufacturing business valuation still sits on size band and sub-sector. Concentration is a modifier, not a different industry.
Why refuse a per-point formula?
A slope that chips 2% of value for every point above 20% looks scientific on a slide. It is not sourced on this site. It treats a 31% medical OEM with a three-year first-article file the same as a 31% spot-buy job. Switching cost, contract term, and gross-profit share move the conversation more than a point of share.
The research file behind this site labels the 0.5–1.5x multiple chip above about 25–30% as a broker rule of thumb. This calculator repeats that label. It will not harden the habit into a law. It will not output a single dollar and call it “the discount.”
Main Street manufacturing in BizBuySell’s 2021–2025 set cleared at 2.75x median SDE, interquartile 2.04x–3.59x, on about $268k of earnings (Source: BizBuySell / Iconic). Concentration is a common reason files sit in the lower half. That is a room fact. It is not a per-point engine.
What defaults does the spec carry — and what must stay out?
Defaults in the spec: habit threshold band 25–30%; habit chip 0.5–1.5x of multiple or structure; Main Street marker 2.75x SDE (Source: BizBuySell / Iconic). Outputs: habit row label, a written “not a statute” flag, and a structure checklist (named-account GP, cap, horizon, information rights).
The spec must not include a discountPercentPerPoint input. If a later developer adds one, they have broken the page.
SBA 7(a) still caps at $5 million with a 10% injection (Source: SBA). Credit committees model the leaving-whale case. Most lenders ignore earn-outs as DSCR. Model coverage on cash at close.
Stanford’s 2024–25 search median of about $16 million at ~6.2x EBITDA on a ~25% margin profile often sits on stickier revenue (Source: Stanford GSB). It is never a job-shop multiple and never a reason to skip the 36-month schedule on a 14-person shop.
How should buyers and sellers use the same table?
Sellers: do not fire the whale as a stunt. Sell my manufacturing business still wants an honest exhibit. Waiting only pays if new billings ship. Time is not diversification.
Buyers: if the schedule cannot be produced, you do not have a commercial file. You have a logo. IBBA Pulse Q1 2026 found 83% of deals over $5 million drew three or more offers (Source: IBBA). Someone else will write a cleaner clause if you leave “we’ll know it when we see it” in the letter.
Census CBP 2023 counted 284,452 establishments; 68.4% have fewer than 20 employees (Source: Census CBP). Small shops win a program and never diversify. That history is allowed. It is still priced — by habit, by structure, or by a walk, not by a fake slope.
BizBuySell’s 2025 manufacturing median close ran 223 days (Source: BizBuySell). Use part of that calendar to build the exhibit, not the week of signing.
Educational information only. Not a live quote. Not an appraisal. Contract interpretation is counsel’s lane. Jason Taken is a business broker with HedgeStone Business Advisors. The conversion path is a confidential intro call.