The financials say what it earned. Not what it takes to run.
The full workstream. Systems, data, licenses, and what actually transfers. Undocumented process and key-person risk. What it costs to modernise, in what order, plus the specific questions to put to the seller before you commit to a price.
- Systems, data, and integration condition
- Licenses and contracts that transfer — or don’t
- Key-person and undocumented process risk
- Modernisation cost, sequenced
- Seller questions written to be sent
- Runs parallel to financial and legal
The workstream nobody runs below ten million.
A small acquisition gets a quality of earnings review, a legal review, sometimes environmental. The systems the buyer will actually inherit are examined by nobody, which is why operational surprises show up in month three instead of week two.
Systems and data
What the business runs on, how the pieces connect, where the data lives, and what condition it is in. Whether the reports anyone relies on are actually reliable.
What transfers at close
Licenses, contracts, domains, hosting, and accounts. Which agreements have change-of-ownership provisions, and what quietly stops working the day the seller leaves.
Key-person and undocumented process
What exists only in somebody’s head. Which relationships belong to a person rather than the business. What happens to the operation if the wrong employee resigns in month two.
Cost to modernise
What the operation needs, what it costs, and the order to do it in. So the number goes into your model before you agree a price rather than after.
Questions for the seller
The specific ones, written to be sent. Some are uncomfortable, deliberately. A motivated seller answers all of them clearly.
It runs beside your other diligence, not after it.
It does not consume deal clock
Ten business days, running in parallel with financial and legal. Nothing waits on us.
It is usually one of the smallest lines in the diligence budget
Depending on the deal, total legal, financial and specialist diligence can easily reach $25,000 to $100,000. This is the workstream that reads what you are actually buying.
Nothing was visibly wrong. That was the problem.
A $3M appliance distributor under LOI. The report found card processing overpayment, a documented $24,428 reconciliation gap between two systems of record, and a contractor network that existed entirely in the departing owner’s head.
Before you decide.
What is buy-side technology and operations due diligence?
The diligence workstream that examines the systems a buyer inherits rather than the financial results. It covers what the business runs on, whether licenses and data transfer at close, which processes are undocumented, and what modernisation will cost.
Why is this not standard on small acquisitions?
Below roughly ten million in transaction value, buyers commission a quality of earnings review and a legal review, sometimes environmental. The operating systems are examined by nobody.
Does it slow the transaction down?
No. It runs in parallel with the other diligence workstreams and takes ten business days.
What does it cost relative to other diligence?
$7,500. Depending on the deal, total legal, financial and specialist diligence can easily reach $25,000 to $100,000.
What if I am still choosing between targets?
Start with the Pre-LOI Screen at $2,500. It is built from the deal file alone in five business days and credits toward full diligence.
Screen first, then commit the budget.
The Pre-LOI Screen reads a target from the deal file alone for $2,500 in five days, and credits toward this if you go forward.