Questions to ask the owner before the transition period ends

Due diligence when buying a small business is mostly about the numbers, and it should be. But the numbers tell you whether to buy. They do not tell you how to run it. That knowledge lives with the owner, and the day the transition period ends it walks out the door.

These are the questions to ask the owner between the letter of intent and the end of the transition. Some you can ask before closing. Most are better after, when the seller is on your side and getting paid to help. Ask them in this order, record the answers with permission, and write them down within a day. Memory fades on your side too.

Customers

Start here because the customers are the business.

1. Who are the twenty accounts that make the money? Not the biggest by revenue. The ones with margin.
2. Which customers pay late, and which ones are worth the wait?
3. Which customers only stay because of you? Be honest.
4. Who has a handshake deal? A discount, a payment term, a promise made ten years ago.
5. Which customers do you wish would leave?
6. Who calls you directly, on your cell, and expects you to pick up?
7. What is the recurring work? Maintenance contracts, seasonal service, inspections. When is each one due?
8. Who has been told about the sale, and who has not?

What to do with the answers: write the top-20 profiles. Build the recurring-service calendar. Draft the ownership-change communication plan for the accounts that matter, and have the seller make the introductions before the transition ends.

Vendors and suppliers

9. Who do you buy from, and what terms do you actually get? Not the printed terms. The real ones.
10. Who gives you a break because they know you?
11. Who do you call when the truck breaks down on a Sunday?
12. What subscriptions and software does the business pay for? Which ones does anyone actually use?
13. What is under contract? Phones, uniforms, fleet, software. When does each one renew?

What to do with the answers: the vendor list with terms and handshake deals. Put every renewal on the calendar. Cancel nothing for 90 days.

Pricing

14. How do you price a job? Walk me through the last three estimates.
15. Is there a pricebook? Where does it live? Is it what the invoices actually say?
16. What is the margin on each type of job, and how do you know?
17. When did prices last go up, and how did customers take it?
18. Which jobs do you take that lose money, and why?

What to do with the answers: build the pricebook with margins. One list, every job type, cost and price and margin. This is the single most valuable document you will own in year one, and most sellers cannot hand it to you because it was never written down.

The calendar

19. What has to happen every month? Every quarter? Every year?
20. Which licenses, certifications and insurance policies renew, and when?
21. Which inspections are due, and who schedules them?
22. When is the slow season, and what do you do about it?
23. What have you forgotten in past years, and what did it cost?

What to do with the answers: the compliance calendar. Put it somewhere that sends reminders to a person, not to an inbox.

The crew

24. Who is the senior tech, and what does he know that nobody else does?
25. Who runs the day when you are not there?
26. Who is thinking about leaving, and why?
27. Who was promised something? A raise, a truck, a title, time off.
28. How does payroll actually work? Who tracks hours, and how?
29. What does a new hire need to know that nobody writes down?
30. Who on the crew will the customers trust after you are gone?

What to do with the answers: nothing, for two weeks. Then ride along with the senior tech and ask him the same questions. If the answers match, you know who to build with. If they do not, you have learned something more important.

How the day runs

31. Walk me through yesterday, from the first phone call to the last invoice.
32. How does a job get dispatched? Who decides, and on what?
33. What happens to a call that comes in after five?
34. What happens to an estimate that does not close?
35. Where do inspection reports and job notes live?
36. What is on paper that should not be?
37. What breaks most often, and what do you do when it does?

What to do with the answers: the "how we do it here" one-pagers. Ten processes, one page each, written in the words of the person who does them, checked by the person who does them.

The owner

Ask these last, and ask them kindly. The owner built this. The point is not to find fault. The point is to find what only they know.

38. What do you do every day that nobody sees?
39. What would break first if you took a month off?
40. What do you wish someone had told you in year one?

What to do with all of it

Forty answers, recorded and written down, is the difference between a business that runs on memory and one that runs on systems. It is also most of what our Knowledge and Handoff line does: the knowledge sessions, the pricebook with margins, the profiles, the calendar, the one-pagers, and a searchable assistant that answers "how did we handle this" from all of it.

Whether you do it yourself or have it done, do it before the transition period ends. After that, every one of these questions costs ten times as much to answer.