Largest Client Share of Revenue
The percentage of total revenue that comes from the single largest client, with the top three clients tracked beside it.
Formula
Largest client revenue ÷ Total revenue × 100
Why Track It
Losing a client that is a fifth of revenue can end an MSP. Concentration tells the owner how much risk one relationship carries and how a buyer will discount the business.
How It Is Measured
From accounting, take trailing twelve month revenue by client. Divide the largest client's revenue by total revenue, and do the same for the top three combined. Count related entities under one parent as one client.
Constraints
A growing MSP with few clients will read high for a while without doing anything wrong. It says nothing about how secure the large relationship is.
Measurement Note
Breakwater M&A describes the ideal as 50 or more clients with none above 10% of revenue, expects a discount when the top client exceeds 15%, and a significant discount when the top three exceed 40%.
Referenced In
Related KPIs
Glossary and Answers
More in Client Health
Whether clients stay, spend more and would recommend the MSP. These numbers warn an owner about revenue at risk before the cancellation notice arrives.
- Client Net Promoter Score (NPS)Account Manager Lead
- Gross Revenue Retention (GRR)Account Manager Lead
- Logo Churn RateAccount Manager Lead
- Net Revenue Retention (NRR)Account Manager Lead