Cinder

Contact name

What: Name of the main contact (owner, broker, or deal contact).

How: As provided in the listing or intro call.

Why: Keeps your notes and reports organized when comparing multiple deals.

Contact email

What: Email address for the contact.

How: Use the primary email you use for this opportunity.

Why: Included on saved reports so you can follow up without hunting for details.

Contact phone

What: Phone number for the contact.

How: Direct line or mobile if available.

Why: Useful for quick follow-up; saved on the report.

Source / broker

What: Where you found the deal or who is representing the seller (e.g. broker, listing site).

How: e.g. "BizBuySell", "Sunbelt", "John Smith – ABC Advisors".

Why: Tracks sourcing and helps when re-engaging later.

Annual revenue ($)

What: Total sales (income) the business generated in the last 12 months.

How: Sum all revenue from the P&L (profit and loss) for the trailing 12 months. Exclude one-time gains.

Why: Sizes the opportunity and is the base for multiples and valuation.

EBITDA ($)

What: Earnings Before Interest, Taxes, Depreciation, and Amortization — operating profitability before financing and accounting choices.

How: Net income + interest + taxes + depreciation + amortization. Often shown on the P&L or as "adjusted" by the seller.

Why: Common basis for valuation multiples (e.g. 4x EBITDA). Higher quality if backed by financials.

EBITDA margin (%)

What: EBITDA as a percentage of revenue. Shows how much profit is left from each dollar of sales.

How: EBITDA ÷ Revenue × 100. Example: $750k EBITDA on $5M revenue = 15%.

Why: Strong margins (e.g. 15%+) suggest pricing power and efficiency; low margins can mean commoditization or inefficiency.

Revenue growth YoY (%)

What: Year-over-year revenue growth rate — how much revenue increased compared to the prior year.

How: (This year revenue − Last year revenue) ÷ Last year revenue × 100. Use trailing 12 months for both.

Why: Growth signals demand and scalability; declining revenue is a risk factor.

Gross margin (%)

What: The profit left after direct costs of delivering the service or product (labor, materials, subcontractors).

How: (Revenue − Cost of goods sold / direct costs) ÷ Revenue × 100.

Why: Higher gross margin (e.g. 30%+) leaves room for overhead and profit; low margin businesses are fragile.

Recurring revenue (%)

What: Share of revenue that repeats (contracts, inspections, monitoring) vs one-time (install, projects).

How: Recurring revenue ÷ Total revenue × 100. Recurring = service contracts, inspections, monitoring.

Why: Recurring revenue is more predictable and often valued higher; too much one-time work increases volatility.

Service vs install mix

What: Percentage of revenue from service (inspection, testing, monitoring) vs installation work.

How: Service revenue ÷ Total revenue × 100. Rest is assumed installation or other.

Why: Service work tends to be more recurring and sticky; installation can be lumpy and competitive.

DSO (days)

What: Days Sales Outstanding — average number of days it takes to collect payment from customers.

How: (Accounts receivable ÷ Revenue) × 365. Often found in financials or from the seller.

Why: Lower DSO (e.g. ≤45 days) means healthier cash flow; high DSO can indicate collection or credit risk.

AR over 90 days (%)

What: Percentage of accounts receivable that is over 90 days past due.

How: AR aged 90+ days ÷ Total AR × 100. Ask for an aging report.

Why: High % suggests collection issues or disputed invoices; can turn into write-offs.

Backlog value ($)

What: Dollar value of work already sold but not yet completed (signed contracts, scheduled work).

How: Sum of contracted or committed revenue not yet recognized. Often provided by the seller.

Why: Backlog provides visibility into near-term revenue and can support financing.

Asking price ($)

What: The price the seller is asking for the business (total purchase price).

How: As stated in the listing or letter of intent; may include inventory, equipment, or exclude real estate.

Why: Compare to valuation (e.g. multiples of revenue or EBITDA) to see if the ask is reasonable.

SDE ($)

What: Seller's Discretionary Earnings — owner compensation and perks added back to show "true" earnings.

How: Net income + owner salary + benefits + one-time or discretionary expenses. Often provided by broker.

Why: Small businesses are often valued on SDE; compare SDE multiple to market norms (e.g. 2–4x).

Customer count

What: Total number of active or billed customers (or contract/account count).

How: Count of unique customers with revenue in the last 12 months (or as defined by the seller).

Why: More customers usually means less concentration risk; compare to revenue for scale.

Top customer concentration (%)

What: Percentage of total revenue that comes from the single largest customer.

How: Largest customer revenue ÷ Total revenue × 100.

Why: High concentration (e.g. >20%) is a risk — losing one customer hurts significantly.

Top 5 customer concentration (%)

What: Percentage of revenue from the top 5 customers combined.

How: Sum of revenue from top 5 customers ÷ Total revenue × 100.

Why: Shows whether revenue is spread or dependent on a few accounts.

Avg contract length (years)

What: Average length of customer contracts in years (e.g. 1, 2, 3 years).

How: Ask the seller or average the contract terms across key customers.

Why: Longer contracts improve visibility and reduce churn risk.

Contract renewal rate (%)

What: Percentage of contracts (or customers) that renew when they come up for renewal.

How: Contracts renewed ÷ Contracts up for renewal × 100, over a period (e.g. last 12 months).

Why: High renewal rate (e.g. 90%+) suggests sticky relationships and recurring revenue quality.

Customer retention rate (%)

What: Percentage of customers that stay with the business year over year.

How: Customers at end of period still active ÷ Customers at start of period × 100.

Why: High retention supports predictable revenue and lowers acquisition cost.

Customer concentration risk

What: Subjective assessment of how dependent the business is on a few large customers.

How: Based on concentration %, contract terms, and customer stability. Choose Low / Moderate / High.

Why: Helps flag due diligence focus: verify key customer relationships and contracts.

Employee count

What: Total number of employees (full-time equivalent).

How: Headcount as of the valuation date or average over the last 12 months.

Why: Sizes the operation and labor base; relevant for integration and culture.

Technicians

What: Number of field technicians (or equivalent) who perform inspections, testing, or installation.

How: Count of roles that are primarily technical/field, not admin or sales.

Why: Technicians drive capacity and often are a key asset; shortage can limit growth.

NICET certified count

What: Number of technicians with NICET (National Institute for Certification in Engineering Technologies) certification.

How: Count of employees holding current NICET certification; level (I–IV) may matter for some work.

Why: Certifications support quality, compliance, and often are required for certain contracts.

Years in business

What: Number of years the company has been operating (or the brand/line of business).

How: Years since founding or since current business model started.

Why: Track record can indicate stability and market reputation.

Code/compliance-driven demand (%)

What: Percentage of demand that is driven by codes, regulations, or compliance (e.g. required inspections).

How: Estimate or ask: revenue from code-mandated work ÷ Total revenue × 100.

Why: Compliance-driven demand is more defensive and recurring; less dependent on sales cycles.

Owner involvement (hours/week)

What: Hours per week the current owner works in the business.

How: Ask the seller or estimate from their role (sales, operations, etc.).

Why: High hours may mean the business depends on the owner; you may need to replace or pay for that labor.

Competitive position

What: How the business compares to competitors in its territory (leader, strong, moderate, niche).

How: Based on market share, reputation, and win rates if known. Often seller or industry input.

Why: Strong position supports pricing and retention; weak position may require investment to improve.

Insurance claims history

What: History of insurance claims (general liability, E&O, workers comp) and their severity.

How: Ask for loss runs or summary from the broker; classify as none / minor / moderate / significant.

Why: Clean history is preferred; significant claims can affect insurability and cost.

Key person dependency

What: How much the business relies on one or a few key people (owner, key technician, sales).

How: Assess whether loss of key person would materially hurt revenue or operations. Low / Moderate / High.

Why: High dependency is a risk at closing; retention or succession plans matter.