Test the quality of revenue
Separate revenue by client, channel, project, geography and source. Examine concentration, collection history, cancellation exposure and the proportion created by one-off relationships.
The core question is not only whether revenue occurred, but whether the system that created it will remain after the transaction.
- Concentration and recurrence
- Collection quality
- Cancellation and clawback exposure
Examine the pipeline, not the headline
Pipeline values are easy to inflate when stage definitions are loose. Sample opportunities, verify evidence, test ageing and compare historical conversion by stage.
A credible pipeline has identifiable buyers, recent actions, realistic probability and an accountable owner. Everything else is a possibility, not an asset.
- Stage verification
- Age and activity
- Historic conversion evidence
Identify people and relationship dependencies
Map which clients, developers, brokers and team members depend on the founder or a small number of executives. Review retention risk, incentive alignment, contractual protection and whether institutional relationships actually belong to the company.
The strongest business can explain how relationships are maintained beyond one individual.
- Key-person exposure
- Relationship ownership
- Team retention
Test the operating infrastructure
Review CRM integrity, reporting, compliance, marketing permissions, sales processes, technology contracts and management cadence. Weak infrastructure may not stop current revenue, but it can make integration expensive and growth unreliable.
Conclude with a quantified risk register and a 100-day operating plan. Due diligence should change the price, the terms, the integration plan—or the decision.
- Systems and data integrity
- Compliance and contract exposure
- 100-day priorities
A transaction should be evaluated on transferable capability, not presentation quality. Commercial diligence gives the buyer a clearer view of what is being acquired, what must be protected and what will require immediate intervention.