Looking at a Painting Business — Customer Concentration Concerns & Structuring Advice?

I’m currently evaluating a painting business and have a seller call scheduled as part of getting reps and learning the search process. While the deal has some strong fundamentals, I’m looking for feedback on mitigating a pretty significant risk. Deal Overview: • Asking Price: $1.4M • 2024 SDE: $458K • Customer Concentration: • One large university accounts for ~35% of revenue • One large hospital accounts for ~15% • No formal contracts in place with either client • The university work flows through 14 separate departments, all tied to the seller’s personal relationships • The owner is retiring but willing to stay on for an extended transition to help maintain client relationships Clearly, the customer concentration is a big red flag, especially with no contracts in place. That said, I’m interested in learning and treating this as a valuable rep in my search. Questions for the community: 1. What questions should I ask the seller to better understand and assess the stickiness of these customer relationships? 2. Are there ways to structure the deal (e.g., earnouts, seller notes, holdbacks) to help mitigate the risk of losing those key clients? 3. Would you even consider proceeding further with something like this, or is the concentration a non-starter in your view? Appreciate any input you all have on how to navigate this conversation and structure it thoughtfully if I decide to go further. Thanks in advance! — CJ