Beyond Revenue: The 5 Key Metrics Buyers Will Obsess Over in 2025

Welcome back to another edition of The Wise Exit!

In today's issue, we're covering:

1. Beyond Revenue: The 5 Key Metrics Buyers Will Obsess Over in 2025

2. Understanding Small Business Valuation Multiples

3. The Power of Referrals in M&A

Let's dive in!

Beyond Revenue: The 5 Key Metrics Buyers Will Obsess Over in 2025

Revenue still matters, but in 2025, buyers are digging deeper. They're looking beyond the top line to find businesses built for long-term success.

Let's break down what really moves the needle in today's market.

Customer Success Metrics

It's not just about how many customers you have—it's about how many you can keep:

• Customer churn must be under 5% annually (many buyers won't look twice if it's higher).

• Your Net Revenue Retention should exceed 100% (showing existing customers spend more over time).

• Average customer tenure should be 3+ years (proving sustainable relationships).

Your ability to keep and grow customer relationships speaks volumes about your business health.

Operational Excellence

These numbers tell buyers if you're built to scale:

• Gross margins trending above 65% (shows pricing power and efficiency).

• Customer acquisition costs recovered within 12 months (longer payback periods raise red flags).

• Revenue per employee above $200K (indicates operational efficiency).

Remember, efficiency matters more than ever in 2025's market.

Future-Proofing Indicators

Smart buyers want proof you're ahead of the curve:

• At least 70% of revenue should be recurring.

• No single customer represents more than 10% of revenue.

• Modern, cloud-based tech stack with documented integration points.

These metrics show you're positioned for tomorrow, not just surviving today.

Most founders focus on revenue growth at the expense of these critical metrics. But in 2025's market, that's not enough. Start tracking these numbers now because buyers certainly will.

Featured Blog 📰

Understanding valuation multiples doesn't have to be complicated.

Our latest blog breaks down industry-specific multiples and shows you exactly how to use them to maximize your exit value.

We cover:

• What valuation multiples really mean.

• How to benchmark against your industry.

• Using multiples to project growth.

• Making better-informed exit decisions.

Read "Small Business Valuation Multiples by Industry - Key Insights" on our blog.

M&A Tips from Brian Dukes 💡

Want to know the secret behind our most successful deals? It's simpler than you might think.

Here's a hint: It all starts with the right introduction.

Read about how referrals have led to our biggest wins on LinkedIn.

That's all for this week!

Remember, what you measure is what you improve. Make sure you're measuring what matters to buyers.

Best,

Brian Dukes