Every diligence process is really a series of falsifiable tests. We run ours in a specific order — the tests most likely to kill the deal go first, not last. This is how we avoid burning weeks on transactions that were never going to close.
Week one is quality of earnings. Normalized EBITDA. Owner add-backs. Revenue concentration. Recurring vs. project revenue mix. We are not looking for a perfect number — we are looking for a defensible one, and for surprises. Most sellers have not normalized their financials the way a buyer will.
Week two is commercial. Customer retention curves by cohort. Ticket size and frequency. Technician productivity. Geographic density of routes. In essential services, unit economics beat topline growth every time.
Week three is operational and organizational. Bench depth below the founder. Systems and technology stack. Licensing and regulatory posture. Insurance and claims history. Facilities and fleet condition. This is where we usually find the biggest gap between what a founder built and what a $30M-revenue platform needs.
Week four is confirmatory legal, tax, and environmental — and the drafting of definitive documents. By this point either both sides are excited and moving fast, or one side has cold feet and we should stop. There is no benefit to dragging things out.
The single most useful thing a founder can do to accelerate this is prepare a clean trailing-twelve-month P&L with owner add-backs identified, a customer list showing top-20 concentration, and a headcount roster with tenure. That alone gets you an indication of value inside a week.
