Is Your Best Customer Hurting Your Company’s Value?
“Chuck Crumpton started Medpoint, a medical consulting firm, in 2002. He sold his business in 2020 for five times EBITDA,” shares Sam Thompson a Minneapolis business broker and the president of M&A firm Transitions In Business. “In this podcast you’ll hear how to reduce dependency on a single customer, sell your company without an earnout and how to establish a strong relationship with large companies.”
In 2002 Chuck Crumpton started Medpoint to help businesses bring medical devices and pharmaceuticals to market. The company quickly took off after Crumpton landed a prominent blue-chip client.
It was a blessing and a curse.
At one point, the blue-chip customer made up 83% of Medpoint’s revenue. Determined to reduce his customer concentration, Crumpton implemented a clever strategy to minimize his dependency.
The strategy worked as Crumpton successfully reduced his reliance below 50%, allowing him to sell Medpoint in 2020 for around five times EBITDA. In this episode, you’ll learn how to:
- Reduce your dependency on a single customer.
- Establish strong relationships with large companies.
- Vet employees to ensure a cultural fit.
- Build trust with independent contractors.
- Lead with integrity.
- Sell your company without an earn-out.