Direct Answer
Operational diligence should explain how the business actually runs without the seller. Focus on customers, people, vendors, systems, equipment, licenses, and the handoff risk that may not appear in adjusted earnings.
Use diligence to find handoff risk
Financial statements show outcomes. Operational diligence explains the machine that produced those outcomes. The buyer's job is to learn what breaks when the owner leaves, a key employee quits, a customer churns, or a vendor changes terms.
Core diligence questions
- Which customers, vendors, and employees would materially change the business if lost?
- What does the owner do weekly that is not documented or delegated?
- Which licenses, permits, certifications, or payer relationships are required?
- What equipment, fleet, software, or systems are critical to daily operations?
- Where do jobs, orders, calls, quotes, and invoices get stuck?
- What must happen in the first 30 days to protect employees and customers?
- Which process gaps are fixable after close and which are deal breakers?
- What evidence supports each answer?
Disclaimers matter
This checklist is educational. Legal, tax, environmental, healthcare, safety, lending, and valuation questions should be reviewed by qualified advisors before a buyer relies on them.
Advisor Review Boundary
Use this page to prepare better screening questions, not to make a final deal decision. Legal, tax, lending, valuation, safety, healthcare, environmental, platform-policy, and deal-document issues should be verified with qualified advisors.
Review status: Review-gated educational screening page. Specialist gate: operator review.