Relationship concentration becomes a serious concern at any revenue level, but it is most acute in companies in the $5M to $50M range. At this size, the management layer is thin enough that key relationships often sit with the owner or a small number of senior leaders.
The customer base is mature enough that most accounts have multi-year histories. And the company’s value — both operationally and in a transaction — is heavily dependent on whether those relationships are transferable.
