The Journal · Selling
What kills a deal in diligence
Deals rarely die at the offer. They die in the weeks after, over five problems that are visible a year out.
Omnira Partners · · 3 min read
Most deals that fall apart don't fall apart at the offer. They fall apart in the six weeks after the handshake, when the buyer and their lender start checking. Five problems end them: books that don't tie, one customer who is the business, a license in the owner's name, an owner who is the whole sales team, and trucks that are done.
Every one of them is visible a year out. Fix them twelve months before you sell, or before you buy, and they never make it into the conversation.
Books that don't tie
Your tax returns, your bank statements and your P&L have to tell the same story. When the return shows one number, the P&L shows another, and nobody can explain the gap, the buyer's lender stops. The buyer stops with them, because the loan is how they were going to pay you.
It's also the easiest to fix ahead of time. A year of clean books that match each other beats a good explanation in the middle of diligence.
One customer is the business
If a single account can walk and take the year with it, the buyer has two choices. They price that risk into the offer, or they walk first.
Show the spread. If there isn't one yet, start building it now. You can't add customers during diligence, but you can spend the year before it winning the work that makes that one account a smaller share.
The license leaves with the owner
This one surprises owners. If the master license is in your name and not the company's, the buyer can't pull a permit the day after close. The deal doesn't always die over it. It stalls for weeks over something that could have been handled a year earlier.
It's fixable. But it has to be fixed before the letter of intent, not during diligence.
The owner is the sales team
If every big job came through your phone, the buyer is buying your phone. And your phone is leaving.
Show them the jobs that came in without you. Work from the website, from referrals, and from the dispatcher's follow-up calls. That's the proof that the revenue belongs to the company and will still be there after you're gone.
The trucks are done
Deferred maintenance is a price cut waiting to happen. A buyer will count every unit, check every mileage, and subtract.
Replace on a schedule and keep the records, and the schedule becomes a selling point. A buyer who sees a fleet that was kept up stops looking for the next surprise.
None of these are secrets
Every one of the five shows up in the first two weeks of diligence. That's the bad news. The good news is that you can see all of them a year out, which means you have a year to fix them.
The same list works when you're the one buying. Ask the seller whose name is on the license, which customers make up the revenue, whose phone the big jobs come through, how old the fleet is, and whether the return matches the P&L. Better to hear the answers before you sign a letter of intent than after.
Running the five early
We run diligence early, on your business before you sell it or on theirs before you buy it. It's the same five questions, asked while there's still time to fix the answers.