"Information is valuable. It's just a question of who's going to get that value." – Caleb LloydIn this episode of the Power Exit Podcast, John Marsh welcomes Caleb Lloyd, partner at Smith and Howard, a seasoned transaction advisor who works with both buyers and sellers on financial due diligence and Quality of Earnings (QoE) reports. Caleb shares eye-opening insights about how QoE reports can make or break deals in the lower middle market. He also reveals a shocking case study where improper accounting adjustments led to a 40% drop in EBITDA, completely killing a deal. He explains why business owners who think reviewed financial statements are enough are setting themselves up for disaster, and how revenue recognition issues can blindside even the most prepared sellers.The conversation dives deep into the brutal reality that most small business owners in the $50-100 million revenue range are keeping "accrual-esque" books that serve operational goals first – not transaction readiness. You'll discover why Caleb tells clients "you can be wrong, just be consistently wrong" and how one home services company used rolling three-month P&L presentations to smooth out margin inconsistencies that would have scared away buyers. He also reveals how sellers regularly leave millions on the table by not identifying favorable adjustments that only surface during buyer-side QoE reports.You'll Learn:🔹Why a $2 million EBITDA business with $1 million in owner expense add-backs triggers intense scrutiny🔹The difference between materiality in audits versus the operational reality buyers need to see🔹How revenue recognition problems can make comparing year-over-year performance impossible🔹Why personal expenses running through the business aren't automatically valid add-backs🔹The "cash proof" process and why it provides crucial third-party credibility🔹How to leverage CRM data to tell your business transformation story with hard numbers🔹Why buyers spend more on QoE reports than sellers (and what that means for deal dynamics)🔹The roll-forward strategy that kept one QoE fresh for two years and doubled business value🔹When $40-70k QoE investment can prevent million-dollar deal disastersWhether you're preparing for an exit or years away from selling, Caleb's practical wisdom shows exactly why quality of earnings isn't just due diligence – it's deal survival.Connect With JohnLinkedIn -   / marshcreek  Connect With CalebLinkedIn -   / caleblloyd  🔸 Get a Complimentary Business Valuationhttps://www.mcreek.com/what-is-my-bus...📌 Subscribe To The PowerExit™ Insights Newsletterhttps://www.mcreek.com/newsletter/🌐 More resources ➝ https://www.mcreek.com/About John Marsh:John Marsh is the Founder and Managing Partner of Marsh Creek Advisors, a boutique M&A advisory firm that helps business owners navigate the sale of their companies with confidence and clarity. Since founding the firm, John has closed hundreds of millions in transactions and earned national recognition as Top Global Producer by the International Business Brokers Association and part of the Firm of the Year by M&A Source — the highest honors in the industry.Before launching Marsh Creek, John served as CFO and later General Manager of a high-growth medical device company, where he led over $300 million in M&A activity, including a $161 million sale to private equity. Earlier in his career, he worked at Ernst & Young and Frazier & Deeter, where he focused on financial reporting and audit services for both Fortune 100 companies and privately held businesses. John holds a BA from the University of Georgia and an MBA from Kennesaw State University. He lives in Sandy Springs, Georgia, with his wife and two daughters.#BusinessExit #QualityOfEarnings #MAAdvisory #DueDiligence #ExitStrategy

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