What a Buyer Actually Checks Before They Pay What You Think It's Worth

Not whether you made money — whether a stranger can prove you made money. Messy financials are a deal-killer rather than a discount. A buyer who cannot tie your reported earnings back to bank activity does not negotiate a lower number. He stops returning calls. You never find out you were close.

How fast can you hand over clean records when asked? This is also a deal-killer rather than a discount. If the documents take three weeks to assemble, the buyer has already started leaving. Speed is read as competence, and slowness is read as risk you are hiding.

Every business has imperfections and risks, and a buyer will dig until he finds them — that part is normal and completely fine. Trying to hide them is what blows up deals. The trap is that most owners have gone blind to their own risks, accepting them as just part of the business. Recognize them, and put them on the table early. Nothing wastes six months like diligence ending on a problem you assumed he already knew about.

This one prices the deal rather than ending it. In the deals SweetSpot has worked, owner dependency commonly caps a business at one to two times earnings and costs the owner at least a full turn of EBITDA. A business that runs through one person is a job in a buyer’s eyes, and a buyer pays what a job is worth.

A buyer looks for contracts, not relationships. Work carried on a handshake is worth less to him than the same work under an agreement he can count on after you are gone, because the relationship might walk out the door with you. And multi-year revenue under contract — with no 30-day out clause — is worth far more still.

Scheduling, dispatch, job costing, collections. Operations produce the profit, so weak systems shrink the earnings any price is built on. Systems don’t have to live on a computer — they just have to be followed the same way every time, and written down somewhere. Doing everything by hand does lower the price a buyer pays, but it is light-years better than ‘check with Jim.’

Your people create the profit, so a buyer needs them to stay — key players especially should be incented to stick around through the sale. When the team walks right after closing, it can trigger clawbacks on money already paid and, often, lawsuits — the kind of mess proper preparation heads off. The exception is a strategic buyer who plans to absorb the business and let the staff go; that is a different playbook, and one we can guide you through.