Deal Flag Criteria

Question 1

If revenue is trending down by more than 5% YOY.

Answer 1

Red Flag

Question 2

Flat revenue or barely trending down (implies neglect / complacency).

Answer 2

Yellow Flag

Question 3

Revenue is trending up.

Answer 3

Green Flag

Question 4

Lease expires in less than a year.

Answer 4

Yellow Flag

Question 5

Lease expires in 5 or more years.

Answer 5

Green Flag

Question 6

A specific license required by State to operate the business, owner is the only one with the license and is not staying on board IF VIA SBA FINANCING.

Answer 6

Black Flag

Question 7

Multiple licenses required by State to operate the business, owner is the only one with the license and is not staying on board IF NON-SBA FINANCING METHODS.

Answer 7

Red Flag

Question 8

License required by State to operate the business, owner is the only one with the license and is not staying on board IF NON-SBA FINANCING METHODS.

Answer 8

Yellow Flag

Question 9

No license requirement OR owner staying on board OR GM with a license staying on board.

Answer 9

Green Flag

Question 10

90%+ of the leads come from a single marketing channel.

Answer 10

Yellow Flag

Question 11

80% of the business coming from existing clients.

Answer 11

Red Flag

Question 12

30%+ of revenue comes from a single customer.

Answer 12

Black Flag

Question 13

20%+ of revenue comes from a single customer.

Answer 13

Red Flag

Question 14

10%+ of revenue comes from a single customer.

Answer 14

Yellow Flag

Question 15

Less than 10% of revenue comes from a single customer.

Answer 15

Green Flag

Question 16

50%+ of the business comes from commercial clients.

Answer 16

Yellow Flag

Question 17

60%+ of the business comes from new construction.

Answer 17

Black Flag

Question 18

50/50 of new construction between residential.

Answer 18

Red Flag

Question 19

5-40% of new construction

Answer 19

Yellow Flag

Question 20

0-5% of new construction.

Answer 20

Green Flag

Question 21

Multiple months having 50%+ more revenue compared to average revenue.

Answer 21

Black Flag

Question 22

Multiple months having 30%+ more revenue compared to average revenue.

Answer 22

Yellow Flag

Question 23

Owner is working 40-60 hours / week.

Answer 23

Red Flag

Question 24

Owner is working 20-30 hours / week.

Answer 24

Yellow Flag

Question 25

Owner is working 0-20 hours. Acts as a sound board to his GMs. Is there for support / morale.

Answer 25

Green Flag

Question 26

1-3 employees.

Answer 26

Black Flag

Question 27

3-7 employees.

Answer 27

Red Flag

Question 28

7-10 employees.

Answer 28

Yellow Flag

Question 29

10+ employees.

Answer 29

Green Flag

Question 30

If there is a family member working in a key role.

Answer 30

Red Flag

Question 31

Husband / wife working key roles.

Answer 31

Yellow Flag

Question 32

10+ insurance claims within the last 2 years

Answer 32

Red Flag

Question 33

Owner is not willing to stay on for support.

Answer 33

Black Flag

Question 34

Owner is willing to stay on for support for less than 2 weeks.

Answer 34

Red Flag

Question 35

Owner is willing to stay on for support for less than 1 month.

Answer 35

Yellow Flag

Question 36

More than 1 month of support. 1-3 months is ideal.

Answer 36

Green Flag

Question 37

Owner is not willing to sign non-compete.

Answer 37

Black Flag

Question 38

Willing to sign non-compete with caveats included.

Answer 38

Yellow Flag

Question 39

Willing to sign non-compete (done with the business, retiring).

Answer 39

Green Flag