Free tool
Would your business survive a buyer's due diligence?
Ten questions, none of which need your accounts open. You get a score, the area that would cause you the most trouble, and for every soft answer the question a buyer's adviser would actually put to you. It will not tell you what the business is worth, because nothing that could tell you that fits on a web page.
Saleability check
Worked from figures entered by the reader. Indicative only, and not advice of any kind.
Ten questions, and none of them need your accounts open.
Answer honestly rather than optimistically. The version of this a buyer runs will not be flattering, and there is no advantage in finding out then instead of now.
Where it is strong and where it is not
- Owner dependence30% of the score
- –
- Customer concentration20% of the score
- –
- Revenue quality20% of the score
- –
- Earnings quality15% of the score
- –
- Records and contracts15% of the score
- –
- There is no value, no multiple and no price anywhere on this page, and there will not be. What a business is worth depends on who is buying it and why, and a number produced from ten answers would be worth nothing to you and rather less than nothing to anyone who relied on it. This measures how ready the business is to be looked at.
- The weighting is ours, from the diligence work we do rather than from a published model. Owner dependence carries almost a third on its own because it is the thing that most often turns a sale into a long earn-out. Treat the ordering as a considered opinion, not a standard.
What this deliberately will not do
There is no number here that turns into a price.
Every other tool of this kind finishes with an indicative range, and it is the reason people build them. We have left it out, and not by oversight: there is no field in this tool that could hold a multiple, and the tests fail if one appears. What a business sells for depends on who is buying, why they are buying, what else is on their desk that month and how the process is run. Ten answers cannot know any of that.
It is the same line the adjusted EBITDA calculator holds, which rebuilds earnings and then stops, because earnings are checkable and a multiple is a negotiation. A number on a screen with nothing behind it is worth nothing to you, and it does real harm to the person who takes it to a meeting.
What this can tell you is whether the business is ready to be examined, and that is both knowable from ten questions and the part you can still change.
The five areas
Weighted the way they actually decide things.
The weighting is ours, from the diligence work we do rather than from a published model. Owner dependence carries almost a third on its own, because it is the line that most often turns a sale into a long earn-out or into nothing. Read the ordering as a considered opinion, not a standard.
| Area | Share of the score | What a buyer is actually testing |
|---|---|---|
| Owner dependence | 30% | Whether the buyer is acquiring a business or acquiring your job. The heaviest line here, because it is the one that most often turns a sale into a long earn-out or into nothing. |
| Customer concentration | 20% | How much of the earnings walks out if one relationship ends. Concentration does not stop a deal on its own; not being able to explain it does. |
| Revenue quality | 20% | How much of next year is already committed rather than hoped for. A buyer is paying for the future and can only inspect the past. |
| Earnings quality | 15% | Whether the reported profit survives contact with the paperwork, and which way the margin has been moving while nobody watched. |
| Records and contracts | 15% | How long a document request takes, and whether what the business runs on is written down. The first read a buyer gets on everything else. |
Owner dependence
- Share of the score
- 30%
- What a buyer is actually testing
- Whether the buyer is acquiring a business or acquiring your job. The heaviest line here, because it is the one that most often turns a sale into a long earn-out or into nothing.
Customer concentration
- Share of the score
- 20%
- What a buyer is actually testing
- How much of the earnings walks out if one relationship ends. Concentration does not stop a deal on its own; not being able to explain it does.
Revenue quality
- Share of the score
- 20%
- What a buyer is actually testing
- How much of next year is already committed rather than hoped for. A buyer is paying for the future and can only inspect the past.
Earnings quality
- Share of the score
- 15%
- What a buyer is actually testing
- Whether the reported profit survives contact with the paperwork, and which way the margin has been moving while nobody watched.
Records and contracts
- Share of the score
- 15%
- What a buyer is actually testing
- How long a document request takes, and whether what the business runs on is written down. The first read a buyer gets on everything else.
A worked example
Good business. Entirely held together by one person.
All 10 answered by an owner whose customers have been with them for years and whose margin has held while revenue grew. Both of those are hard to build and neither is what a buyer would spend the first meeting on, because the customers ring the owner and the business would not run for a quarter without them.
49 / 100
A real business, not yet a transferable one.
There is a real trading business here, and it is currently held together in ways that do not transfer. That is the ordinary position, and it is the reason preparation is a project with a timeline rather than a conversation before listing.
Where it is strong and where it is not
- Owner dependence30% of the score
- 17
- Customer concentration20% of the score
- 83
- Revenue quality20% of the score
- 50
- Earnings quality15% of the score
- 67
- Records and contracts15% of the score
- 50
What a buyer would ask you about
5 answers would draw a question in diligence. This is what it would sound like.
When a customer has a problem, who do they ring?
You said: Me. The relationship is with me rather than with the business.
Which of these customers is buying from the business and which is buying from you? That difference decides how long you are required to stay and what happens if you do not.
You are unreachable for three months. What happens?
You said: It coasts for a few weeks, then things start going wrong.
Who runs this on the Monday after settlement, and what are you doing that they are not? Every week of that answer is a week you stay on after the sale.
How much of next year's revenue is already contracted, retained or on subscription?
You said: Under a quarter, but the repeat work is reliable.
What is committed in writing and what is a habit? A habit is real, and it is not something a new owner automatically inherits.
How much of what runs through the business is personal or one-off?
You said: A fair amount, and some would be hard to prove.
Every add-back needs paperwork behind it. Which of these survives if I ask for the invoice, and which one are you going to tell me I just have to take on trust?
Are your lease, key supply agreements and employment contracts signed and current?
You said: Some are verbal, or expired years ago and nobody minds.
A lease with eleven months left on it is not premises. What actually transfers on settlement, and what has to be renegotiated with someone who now knows you are selling?
The score is 49, and it is the least useful thing on the panel. What matters is the list underneath it: 5 answers that would each draw a question, and the questions themselves written the way they would actually be asked.
Note where the weight sits. Customer concentration and earnings quality are both strong here and they cannot carry the result, because owner dependence is worth more than either of them and this business scores near the bottom of it.
What this does not cover
- What the business is worth, what multiple applies, or any figure a reader could turn into a price
- Anything about tax, structure or the way a sale would be documented, which are your accountant's and your lawyer's
- Whether now is a good time to sell, which is about your life rather than your ledger
- Industry-specific licensing, accreditation or transfer conditions, which vary enough that a general question would mislead
- Anything you type. Nothing on this page is sent anywhere or stored
The same exercise, run properly.
This is ten questions and your own honesty. Our due diligence work is the same examination run from the other side of the table, on a real set of accounts, with the documents actually requested and read.
Want the finance arranged as well?
This site does the analysis and the documents, and does not arrange credit. The broking is done by The Lending Lab, a separate business run by the same person. Send a few details and Nick handles it himself.
Common questions
No, and it never will. There is no value, no multiple and no price anywhere on this page, and the tool is built so that no field could carry one. What a business sells for depends on who is buying it, why, and what else they are looking at, none of which ten questions can know. A number produced from this would be worth nothing to you and considerably less than nothing to anyone who acted on it. What it measures is how ready the business is to be looked at, which is a different question and the one you can actually do something about.
No. Nothing here is gated, nothing you answer is sent anywhere, and the score appears as you go. Every other tool on this site works the same way and this one was not going to be the exception.
Us. The five areas and the weighting between them come from the due diligence work we do rather than from a published model, so treat the ordering as a considered opinion rather than a standard. Owner dependence carries almost a third on its own because it is the thing that most often turns a sale into a long earn-out or into nothing at all.
It is a reason not to start next month. A low score usually means the business has been run to make a living rather than to be handed over, which is what most businesses are for and no reflection on the trading. What it tells you is that preparation is a project with a timeline rather than a conversation with an agent, and that finding out now beats finding out three weeks into a process.
Almost always owner dependence. Nearly everything else on the list is easier to fix once the business runs without you, and none of it counts for much if it does not. If a buyer concludes they are acquiring your job, the rest of the conversation is about how long you are staying rather than about the business.
Yes. The version of this that a buyer's adviser runs will not be flattering either, and they will run it with your bank statements open. Answering optimistically here produces a better number and a worse outcome. Nobody sees your answers, so there is nothing to gain from them.
Most of it is work you can do yourself over a few quarters, and the list is written so you can. Where it turns into a genuine process, our due diligence work is the same exercise run properly and from the other side of the table, on a real set of accounts rather than ten answers.
General information only. Indicative, not a credit assessment, and not an offer of finance. Lending decisions rest with the lender and depend on your circumstances and their criteria. This is a self-assessment, not a valuation, an appraisal or a review of your business. It produces no value, multiple or price, and no part of it is an opinion on what any business would sell for. The areas and their weighting are our own, drawn from the diligence work we do rather than from a published standard.