Reddit Q&A: “Buying a small business—what questions should I ask during due diligence?”

Posted by u/SeriousBuyer2025:

“Buying a small business. What questions should I ask during…? …financials, operations, customers, assets, reason for selling, marketing, legal compliance, growth potential.”

Answer from the Clearly Acquired Deal Team
Signed by Samson Jagoras, CEO & CIO

You nailed the key areas—due diligence isn’t just about numbers, it’s about understanding the health, sustainability, and future of a business. Here are the high-impact questions we ask and guide our buyers to use:

✅ Due Diligence Checklist — Top Questions by Category

1. Financials

• Can you provide adjusted EBITDA with explanations for any one-time or non-recurring expenses?
• Are revenues seasonal, and if so, how does that affect cash flow?
• Are there any off-balance‐sheet liabilities, like pending lawsuits, lease obligations, or vendor guarantees?

2. Operations

• What are key processes and systems (ERP, CRM, supply chain, etc.)? Are they documented and scalable?
• How dependent is the business on founders or specific employees? Could operations continue if they left?

3. Customers & Contracts

• Who are the top 5 customers, and what percent of revenue do they represent?
• Are key contracts transferable or at risk of termination post-acquisition?

4. Assets & Inventory

• Can you provide an assets schedule, including equipment, IP, and inventory valuation?
• What is the age and condition of major machinery, and are maintenance records available?

5. Reason for Selling

• Why are the owners selling now? Are there underlying issues prompting a sale?
• What will post-sale commitments look like — stay on? Transition?

6. Marketing & Growth

• What is the client acquisition cost (CAC) and customer lifetime value (LTV)?
• What channels drive growth—SEO, paid ads, referrals?

7. Legal Compliance

• Are all necessary licenses and permits current and transferable?
• Any historical or pending compliance issues, lawsuits, or liabilities?

8. Growth Potential

• What are the top 3 growth levers, and is there a documented growth plan?
• What investment is needed to scale—tech, staff, sales?

🧩 Due Diligence Summary Table

💡 Why These Matter

• Financial clarity reveals true cash flow and hidden costs.
• Operational depth highlights risks around key people and systems.
• Customer insights ensure revenue stability and transitionability.
• Asset checks uncover reinvestment needs or depreciation issues.
• Sale motivations signal potential trouble areas.
• Marketing metrics show if growth is sustainable or driven by founder hustle.
• Legal vetting protects you from liabilities and compliance failures.
• Growth planning ensures you're not buying a stagnant model.

🏁 Final Take

Use this list as a due diligence scorecard. Adjust the questions by industry (tech-enabled vs. service-based) and buyer objectives (cash flow vs. scalability). It’s not just about checking boxes—it’s about uncovering the truth behind the business.

At Clearly Acquired, we support buyers with templated checklists, expert advisors, and a proven process that ensures informed decisions and smoother integrations.

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Onward,

Samson Jagoras
CEO & Chief Investment Officer
Clearly Acquired

P.S. Want a downloadable DD checklist or a walkthrough call? We’ve got you covered.

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