Revenue churn / customer count trend

What it is

How the business's customer count and recurring revenue have actually trended over the past several years — not just the top-line number, but who's leaving, who's new, and whether the underlying base is growing, flat, or shrinking.

Why it matters

A flat or slowly declining top line can hide behind a perfectly good SDE (seller's discretionary earnings) number, especially if price increases have masked a shrinking customer base. That's a common way a tired owner dresses up a business that's losing momentum — and momentum is much harder to fix after closing than a single bad year is to explain.

What to look for

• Customer count declining even while revenue holds flat or grows (a sign of price increases masking churn)
• No real visibility into churn because there's no CRM, customer list, or retention tracking
• A pattern of customers leaving shortly after past price increases
• New customer acquisition that's slowed or stalled over the past year or two