Free Tool
Client Concentration Risk Calculator
Client concentration risk is how much of your revenue depends on a single customer. Enter your client list to get a concentration score, a risk grade from A to F, and a plain answer to one question: what happens to your business if your biggest client leaves tomorrow?
Want a runway estimate too? (optional)
This is not a hypothetical risk
On r/smallbusiness, one owner described a maintenance business built over almost 15 years where a single account had grown to make up more than 90% of income. When the client hired a new manager and brought the work in-house, that revenue disappeared in a week — along with one of the owner's few employees. A top comment on that thread put it plainly: a business like that should never rely on a single customer. In the same discussion, another owner mentioned running roughly $1.5M in revenue with one client accounting for 98% of it — workable only because the operation was almost entirely automated.
Elsewhere on r/Solopreneur, an agency owner lost a client worth about 40% of annual revenue (roughly $50,000) after a single unresolved complaint sat unnoticed online for three weeks before a competitor stepped in. None of these owners set out to be this dependent on one client — concentration tends to creep up gradually, one good year at a time, until it's the whole business.
How this is calculated
Your largest client's share of total revenue drives the A–F grade. The concentration score is the Herfindahl-Hirschman Index (HHI): each client's percentage share of revenue is squared and summed, producing a number from 0 (revenue spread evenly across many clients) to 10,000 (one client is everything). The runway estimate divides your cash reserves by the monthly shortfall that would remain if your biggest client left and your expenses stayed the same.
Frequently Asked Questions
What is client concentration risk?
Client concentration risk is the share of your total revenue that comes from a single customer. The higher that share, the more your business's survival depends on one relationship you don't fully control — a new decision-maker, a budget cut, or a competitor's pitch can remove a large chunk of income overnight.
How is the concentration score (HHI) calculated?
This tool uses the Herfindahl-Hirschman Index, the same formula economists use to measure market concentration, applied to your client base. Each client's revenue share (as a percentage of total) is squared, and the squares are summed. A score near 0 means revenue is spread evenly across many clients; a score near 10,000 means one client is effectively 100% of your income.
What percentage should one client be capped at?
A common rule of thumb used in freelance and agency circles is that no single client should exceed roughly 20% of revenue. Past that point, losing the relationship stops being a bad month and starts being an existential event.
What should I do if one client is too large?
Start by treating new business development as a fixed weekly task, not something you get to "when things slow down." In parallel, document the relationship formally (contracts, notice periods), diversify the services or contacts within that account so it isn't one person's goodwill keeping it alive, and build a cash reserve sized to survive losing it.
Does this calculator store or send my client data anywhere?
No. Everything is calculated in your browser using simple arithmetic. Nothing you type here is transmitted, saved, or sent to a server — refreshing the page clears it.
Is having one dominant client always a mistake?
Not necessarily — some agency-of-record or subcontracting arrangements are intentionally structured around one large client. But it's a deliberate trade-off, not a default you should end up in by accident, and it should come with contractual protection and a real exit plan, not just hope.
How often should I re-run this calculation?
Quarterly is a reasonable cadence for most solopreneurs, or any time you sign, lose, or significantly grow a client relationship — concentration risk can shift fast in a small business.
Related resources
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