On this episode of Still Searching with Jed Morris, M&A financial due diligence pro Jonathan Hutchins pulls back the curtain on what actually happens between LOI and close. Jonathan is a CPA who cut his teeth in audit at EY before moving to the diligence side, and he now works deals from a $300K enterprise value all the way up to nearly $100M. His take: deal size matters less than you think. Industry drives the complexity, and the same landmines show up at every level.

Jed and Jonathan walk the fundamentals a first-time buyer has to command: revenue trend, gross profit against industry benchmarks, costs miscoded between COGS and SG&A, customer concentration, and the key man whose relationships walk out the door with him. Then the sharper edges: owner personal expenses buried across a dozen GL accounts, add-backs that are secretly marketing spend, and the purchase agreement definitions that quietly erase the value your QoE found. About 70 percent of the time the EBITDA checks out. You hire the professional for the other 30. And if you will sign for millions in personally guaranteed debt but balk at paying for a QoE, your whole philosophy of risk is skewed.

A buyer walks away with: the pre-LOI financial checks to run yourself, the red flag that ends a deal on the spot (data that contradicts management), and the three-person deal team no buyer should close without.

Full transcript: https://jedmorris.com/podcast/ma-financial-secrets-jonathan-hutchins

Watch on YouTube: https://www.youtube.com/watch?v=wLV6wOQdmaw

Connect with Jonathan Hutchins: https://www.linkedin.com/in/jonathangh