Midwest CPA's Post
A deal we worked on almost closed… until the Quality of Earnings (Q of E) review uncovered a hidden red flag. The seller reported their largest customer represented 20% of revenue. After deeper analysis, the real number was over 60%. Once we removed internal transactions that were inflating revenue, the business was far more dependent on a single customer than anyone realized and the deal ultimately fell apart. This is customer concentration risk, and it’s one of the most overlooked red flags in small business acquisitions. In our blog post, we break down: • What customer concentration risk is • How it can hide in plain sight • A real case study from a recent deal • How buyers and sellers can mitigate the risk 📖 Read the full post to learn how to spot this silent deal killer before it costs you: https://midwest.cpa/resources/customer-concentration-risk-mitigation/