Not All Revenue Is Equal

By Jeff Gau, Marco CEOGrowing up in a small town, I was taught that a dollar is a dollar. You work hard for it and it is valued. But, in my past 15 years at the helm of Marco growing the business and buying others, I have learned that not all revenue is equal. Some revenue is actually better than others.

We have worked with almost 100 businesses to evaluate a potential purchase and have identified a series of quality revenue indicators, including:

  • Duration of customer contracts
    It’s common to consider the number of contractual relationships with your customers. But it is the length of those contracts that matter most to buyers.
  • Customer concentration
    Buyers want to see a good distribution of accounts, industries and a proper mix of client size.
  • Bundled agreements
    Bundled agreements establish a recurring revenue stream that provides a more predictable profit picture.

Read more on these and other indicators of quality revenue.

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