The revenue is recurring. The right to it renews every thirty days.

Two businesses with identical revenue lines can be valued very differently, and the reason is often buried in a clause nobody has read since signing.

By Steve 5 min read
Abstract bridge artwork for The revenue is recurring. The right to it renews every thirty days.

An owner looks at the management accounts and sees £2m of recurring revenue: the same forty-odd customers, most of them for years, monthly invoicing, low churn. A buyer looks at the same page and sees something narrower, £2m of revenue that any customer can end with thirty days’ notice, that requires each customer’s written consent to transfer, and that in a third of cases names the founder as the person doing the work. Both are looking at the same business. They are pricing different things. The owner is pricing evidence;…

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Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

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