QFF: Rick Calabrese Co-Founder of Commonwealth M&A on Selling 7 Companies in 2.5 Yrs, Valuing $5M-$100M Businesses, Owner Risks, & Why the Best Clients Are Always on Vacation—Not Running Payroll. (Episode 691 - Rick Calabrese)

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Welcome to Quick Fire Friday, the Grow A Small Business podcast series that is designed to deliver simple, focused and actionable insights and key takeaways in less than 20 minutes a week.

Every Friday, we bring you business owners and experts who share their top strategies for growing yourself, your team and your small business. Get ready for a dose of inspiration, one action you can implement and quotable quotes that will stick with you long after the episode ends!

In this episode of Quick Fire Friday, host Rob Cameron speaks with Rick Calabrese, a specialist in business valuation and owner of Commonwealth M&A. Rick delves into the critical role of professional valuations for small business owners, particularly those in the lower middle market with revenues ranging from $5 million to $100 million. He explains why business value is often an intangible asset that requires expert assessment. Rick also highlights common factors that impact valuations, such as heavy owner involvement and customer concentration. Sharing insights from his firm’s track record—successfully selling seven businesses in just two and a half years—he underscores the importance of strengthening operational systems, refining financial metrics, and building a trusted team of advisors. Ultimately, Rick emphasizes that thoughtful preparation and a clear plan are essential to achieving a successful business exit.

Key Takeaways for Small Business Owners:

Get a Professional Valuation: Your business is likely your largest asset, yet its value is often intangible. Engage valuation specialists to understand its true worth, especially before planning an exit.

Reduce Owner Dependence: Businesses that are overly reliant on the owner are harder to sell. Build strong teams and systems so the company can thrive without you. The most attractive businesses are often run by owners who can afford to be on vacation.

Diversify Your Customer Base: Avoid heavy customer concentration. Buyers see too much revenue tied to a few clients as a risk. Broaden your client mix and aim for recurring revenue streams.

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Plan Early & Be Patient: Preparing for a sale can take years. Strengthen operations, improve financial metrics, and update valuations regularly so you’re ready when the time—and the market—is right.

Build a Trusted Deal Team: Selling a business isn’t like selling a house. Surround yourself with experienced advisors—specialist lawyers, CPAs, and M&A experts—to guide you through this complex process.

Understand the Buyer’s Perspective: Buyers focus on risk, stability, and future cash flows. Position your business as a predictable, systematized operation to command a premium price.

One action small business owners can take:

According to Rick Calabrese, one action a small business owner should take is to reduce owner dependence by building strong teams and systems—so the business can operate smoothly without them, making it far more attractive and valuable to future buyers.

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