Who they are and why do they deal with this company?
Do one or two customers make up the lion’s share of turnover?
Will they continue to do business with a new owner?
Are they contracted in?
Is there a good spread of clients?
Do they pay on time?
Are there any contracts in place? Are they transferable?
When do they need to be paid?
Are they a reliable source for supply?
Are there any alternative suppliers in this field?
The product or service
Is it immune to cheap foreign imports?
Are there barriers to entry?
Does it have a point of difference?
Is it a ‘sunrise’ or ‘sunset’ business?
If a service, what is the availability of future staff?
Is there an incidence of technology change/innovation with products?
Is the plant and equipment up to date?
Is there new technology on the horizon?
What needs replacing?
What is the level of capacity utilisation?
What is the real value, opposed to the book value?
Is there is a maintenance programme in place?
Can the premises accommodate growth?
Can the lease be reassigned?
Can the lease term be extended? Is it at market rates?
Do the premises require repair, maintenance or reinstatement?
How appropriate is the location for the business?
Are profits showing year on year growth?
Is EBIT at a satisfactory level showing an acceptable return on investment?
Have you a record of all significant distortions of profits over the last three years?
Are personal and discretionary expenses recorded so that ‘true profits’ can be calculated?
Is the profit level sustainable?