Start with the operating brief.
Start with the work you want the business to perform and the customers you understand. A service company may be built around contracts, repeat projects or an individual’s reputation. Your brief should distinguish those preferences and explain whether you want to lead delivery, manage a team or combine the business with an existing operation.
Customer durability
Which customers contribute revenue and gross profit, and what evidence supports their continued demand? Review concentration, renewal history and the basis on which work is commissioned. Ask which relationships depend on the owner and what introductions or consents may be needed for a transition.
Delivery capability
Who actually delivers the service, and which skills are difficult to replace? Examine workload, utilisation, subcontracting and quality controls using the target’s records. Consider the management and recruitment effort your ownership plan would require rather than assuming a contract book operates by itself.
Cash and scope
How do invoicing, collection, deposits and project costs affect cash requirements? Clarify work in progress, customer commitments, staff obligations and intellectual property included in the deal. Obtain advice on contract continuity and the transaction structure where those matters affect the proposed acquisition.
Questions to take into an assessment.
- What proportion of work is contracted, repeat or newly won?
- How are customer concentration and overdue receivables explained?
- Which delivery responsibilities would move to you after completion?
- What would the seller do during a transition period?
The right fit for you.
A useful brief names the services and customer types you can assess, your capacity to manage people and your intended operating role. It should also state whether you are seeking a standalone business or a complementary capability for an existing company.
For an owner considering a transition.
Owners can prepare an anonymised service mix, customer-concentration summary and explanation of team responsibilities. Detailed contracts, client identities and employee information can follow under agreed disclosure arrangements. Clearly separate signed work from pipeline or expectations of future demand.
Educational prompts, not findings about a specific company or a statement of regulatory requirements. Sector permissions and transaction matters require appropriate review when a real opportunity exists.