Red flag screen

The business

What kind of business this is decides which checks apply.

1. What kind of business is it?

Choose one.

Some checks only apply to some kinds of business, for example platform checks for online businesses.

Software or SaaSEcommerce or online shopContent site, app or online marketplaceAgency or professional servicesPhysical business, such as retail, hospitality, trades or manufacturingSomething else

Figures and records

What the listing and the seller have told you about the numbers.

2. How have revenue and profit moved over the last two or three years?

Choose one.

3. How has the profit figure been adjusted?

Choose one.

Add-backs are costs added back to profit, such as the owner's salary or a one-off expense.

Few or small add-backs, each one explainedLarge add-backs, or add-backs without an explanationThe seller mentions cash takings or income that is not in the accountsThe listing does not say

4. What financial records has the seller offered so far?

Choose one.

Accounts and tax returns that agree with each otherAccounts or management figures onlyA summary only, with full records promised laterRecords that disagree, such as accounts and tax returns with different figures

5. Which of these have you noticed in the figures or been told?

Tick any that apply, or leave blank.

Tick any that apply. Leave blank if none do.

Profit margins well above similar businessesRecent sales relied on heavy discounts or promotionsCustomers pay upfront, for example annual plans, deposits or gift cardsStock is old, slow-moving or has been written downSuppliers or tax are being paid later than usualEquipment, vehicles, premises or software need spending on soonDeals with companies or people connected to the owner

Customers and revenue

Where revenue comes from and how secure it is.

6. How much revenue comes from the largest customer?

Choose one.

Less than 10%Between 10% and 20%More than 20%The listing does not say

7. Where do most new customers come from?

Choose one.

A mix of channelsMostly repeat customers or word of mouthMostly one channel, such as paid ads, one marketplace or one partnerMostly search engine trafficThe listing does not say

8. What is happening to churn, refunds or chargebacks?

Choose one.

Churn is the share of customers or revenue lost each month or year.

Stable or fallingRisingThe listing does not sayDoes not apply to this business

Owner, staff and suppliers

Who runs the business and what it depends on.

9. What does the owner do day to day?

Choose one.

A manager runs the business and the owner oversees itThe owner works in the business, but staff handle sales and key customersThe owner does the selling or holds the key relationshipsThe listing does not say

10. Which of these apply to staff and suppliers?

Tick any that apply, or leave blank.

Tick any that apply. Leave blank if none do.

Key staff have no contracts, notice periods or reasons to stayMuch of the work is done by contractors who work like employeesFamily members or people close to the owner are on the payrollLittle is written down, and processes live in people's headsMost stock, production or a key service comes from one supplier

Legal matters and premises

Claims, licences, leases, contracts and ownership of assets.

11. Which of these apply to legal matters, contracts and premises?

Tick any that apply, or leave blank.

Tick any that apply. Leave blank if none do.

There is a dispute, claim or legal threatThe business needs a licence, permit or registration to tradeThe lease ends within two years or needs the landlord's consent to transferImportant contracts need consent to transfer or end on a saleBrand names, designs, content or code belong to the owner personally or to freelancersCustomer emails or data were collected without clear consentThere are tax arrears, a payment plan or a tax investigation

Websites, platforms and accounts

Leave these blank if the business does not trade online.

12. Which of these apply to websites, platforms and online accounts?

Tick any that apply, or leave blank.

Tick any that apply. Leave blank if none do or the business is not online.

A recent fall in traffic after a search or platform changeWarnings, suspensions or policy strikes on a marketplace, app store or ad accountReviews that look incentivised, copied or boughtDomains, social media or platform accounts held in the owner's personal nameSoftware that is old, undocumented or has had security problems

The seller and the sale

How the sale is being run so far.

13. Why is the owner selling?

Choose one.

A clear reason, such as retirement, health or another ventureThe reason is vague, or it has changedThe listing does not say

14. How long has the business been for sale?

Choose one.

Listed recently, for the first timeListed for a long time, or listed beforeNot sure

15. Which of these describe the seller or their broker so far?

Tick any that apply, or leave blank.

Tick any that apply. Leave blank if none do.

Pressing you to decide quickly or to skip checksSlow or unwilling to share records you have asked forRefuses any seller finance, earn-out or deferred paymentFigures have changed between the listing, the teaser and later documents

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Questions about the listing

The business

Figures and records

Customers and revenue

Owner, staff and suppliers

Legal matters and premises

Websites, platforms and accounts

The seller and the sale