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Business BuyingExiting & Selling

You’d Think They’d Know Better

By November 15, 2023No Comments

The Seattle Times had an article on Bellevue’s Spring District development and one line was, “But all has not gone according to plan.” They attracted Bellevue Brewing (a really cool place), not much retail, and an overabundance of space going to Meta. And Meta has, “yet to decide when they are going to occupy.”

In our world we call it customer concentration, and it can be deadly.

When a customer keeps growing with a small business there had better be a symbiotic relationship, especially when it comes time to exit.

I’ve written before about a dietary supplement manufacturer who called me because his 90% customer had a new CEO, and that person moved all manufacturing to a friend’s company. Sorry, no buyer for that company.

On the flip side, a client bought a plumbing business with 90% concentration, and it worked out fabulously because they needed each other.

The same thing with vendors. A client has a very successful product line with no backup if anything happens to the supplier or if the supplier goes with a larger distributor (which happens all the time).

A large, growing customer is an easy trap to fall in to. You must be careful.

“I’m always ready to learn, although I do not always like being taught.” Winston Churchill