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Caleb Basile

Caleb Basile

Caleb Basile, CPA, is the founder of QOE Prep, a boutique firm specializing exclusively in Quality of Earnings reports for small and lower-middle-market M&A transactions.

Oct 7, 2026

34:34
Yeah.
34:34
The kids are not, the kids are not, uh, signing those, uh, non-competes.
34:39
Uh, and then another huge red flag everyone knows about is customers, but then also the referral sources.
34:45
Like, if they're getting their referrals from one or two referral sources.
34:48
So one of my competitors just sold, okay? Um, and now I'm getting deals from loan brokers who used to send deals to that, that, that QB provider that just sold because they're not doing as good of a job as the previous one.
35:03
So that referral source, which was a large portion of that competitor's referrals, they're now all coming to me.
35:11
So [chuckles] that, that's going to happen when you s- when someone s- sells their business and they get a lot of referrals from one of three sources, uh, one of three.

12 MINS LATER

47:46
Right
8:48
What are some of those things? Right.
8:50
So a buyer is going to analyze their books, their businesses, and anything that doesn't line up or anything that scares them, they're going to question about it.
9:01
So typically in the past, it used to be like a broker, an investment banker, and then a seller like, all right, let's put our business together and let's show it off and then see what the buyers come back with.
9:11
But now with a sell-side QV or a QV prep, when you prepare for a QV, You can get a good idea of what the buyers are going to ask you, and we will be there with you answering their questions that are relevant to the QV.
9:24
You answer the business questions, the broker or the investment banker answers the investment banker questions, and then we answer the quality of earnings questions.
9:36
So you're right, an audit does cover a lot of the financials, the income statement and the balance sheet, but it doesn't really talk about concentration risk.
9:45
So what does the customer concentration look like? What are the vendors concentration look like? Is there any related party in the company? Who's making the sales of a small business? If the owner is making most of the sales and he's trying to sell his business, he's not going to get as great of a multiple than if there's a team of salesmen because that poses a larger risk to a buyer.

11 MINS LATER

21:14
And the

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