50 questions to ask before you buy a business
This story was originally published on Letters by Evernomic, a weekly publication for founders and investors where we write about what we’re learning from building and scaling companies across media and software. Subscribe here for the full versions every week.
You can learn a lot about a buyer by the questions they ask. The average buyer sends over a due diligence checklist they got from ChatGPT. P&L statements, churn rates, traffic sources. Those things matter but it's table stakes. It tells you nothing about how seriously they're evaluating the business or how well they understand what they'd actually be buying.
The best buyers ask different questions. They ask things that make you pause and force you to look at your own business from an angle you (maybe) hadn't thought about. They're trying to figure out whether this thing still works once they're the ones running it.
I've been on the sell side of enough acquisitions across media properties, SaaS products, marketplaces, and communities to notice patterns. These are 50 questions that stood out. Not because they're the most common, but because they actually mean something.
If you're a buyer, asking the right questions shows you're serious and that you actually understand the business. If you're a seller, having answers to these ready before anyone asks shows you're prepared. And prepared sellers close faster and at better terms.
Revenue quality
What percentage of revenue comes from your top 10 customers? If one account makes up 40% of revenue, you're not really buying a business. You're mostly buying a relationship with that customer.
For credit or token-based purchases, how many of those buyers actually come back and buy again? This is basically your repeat purchase rate for non-subscription revenue.
Was there a single month that skewed the annual numbers? What happened?
How long does your average customer stick around and what keeps them there?
Have any customers pre-paid annually? When do those renewals come up?
What's the refund rate and has it changed in the last six months? Rising refunds usually show up before churn kills you.
How much of last month's revenue came from marketing spend versus organic?
Is there seasonality in the business and what does it look like? This isn't a red flag. An exam prep app will obviously spike around academic cycles. What matters is whether the seller understands the pattern and uses the off-season productively. Things like shipping features during quiet months, building partnerships, or planning campaigns for the next cycle. Seasonality with a strategy behind it is fine. Seasonality that catches the seller off guard is not.
Audience and engagement
What's the open rate trend over the last twelve months? Not the average. The trend.
What's the comment rate, and what's the reply rate to those comments? This separates actual engagement from passive consumption. High views with no replies usually means people are scrolling, not reading.
How many subscribers have been on the list for more than a year and still open regularly?
Have you ever missed a publishing cadence? What happened to traffic and engagement when you did? If nobody notices when you skip a week, that's a problem.
Has any single piece of content or event driven a disproportionate chunk of subscriber growth?
If you removed social media distribution entirely, what would traffic look like? A Substack newsletter has way higher platform dependency than one on Beehiiv or Ghost, and that distinction matters for what you're actually acquiring.
What's the unsubscribe spike after promotional emails versus regular content?
What's your deliverability rate and have you had issues with spam filters or blacklists? A list of 100,000 subscribers means a lot less if 30% of sends land in spam.
Operations and dependencies
Can you share the last 30 days of support ticket volume? This tells you two things. How much operational load comes with the business, and that the buyer actually did their homework on which support tool you're running.
How many hours per week does this business actually take? Be honest. It's not as nice as you'd expect for a buyer to hear this business takes no input whatsoever.
What keeps breaking or falling behind that you haven't had time to fix?
Which tools or platforms would break the business if they changed their terms tomorrow? Something built entirely on Shopify's API or Meta's ad platform carries a different risk than something with its own infrastructure. A lot of companies paid the price for this when X changed their API terms.
Is there anything that only you know how to do that's not documented anywhere? Context is often the most valuable asset the team could transfer.
Who are the contractors or freelancers involved and which ones would be hard to replace?
What does the on-call or incident response process look like? Or does one not exist?
Walk me through a typical week operationally. Monday to Friday.
Product and technology
When was the last time you shipped something meaningful and what was it?
What's the oldest part of the codebase and how often does it cause problems?
What's in the backlog that customers keep asking for that you haven't built?
Are there known bugs you've just chosen to live with? Why?
Do you have automated tests? What's the coverage like?
How painful would it be to migrate off your current hosting or infrastructure? This is where most transitions get messy. Some buyers may want to take advantage of their own infrastructure to mitigate costs.
If a critical dependency pushed a breaking change tomorrow, how long would the fix take?
Growth and acquisition channels
What's your customer acquisition cost by channel and which channel is getting more expensive?
Is there a channel or strategy you think would work but haven't tried yet? Good for sizing upside but also for understanding why it hasn't happened. Usually it's time, not ideas.
How much of your growth is organic search and how exposed is that to an algorithm change?
Have you ever tried paid acquisition? What happened?
What's the conversion rate from free to paid and has it moved in the last year?
Where do you think the easiest revenue gains are that you just haven't gotten to?
Community and marketplaces
What's the ratio of active contributors to lurkers?
How concentrated is activity among your top users? Does the community fall apart if five people leave?
What's the supply-side retention rate after their first transaction?
How do buyers and sellers currently find each other outside your platform?
What's the take rate and have you tested whether the market tolerates a higher one?
How much activity happens off-platform after the initial connection? This is the disintermediation question. If people can cut you out after the first transaction, the platform's long-term value is shaky.
Who's actually paying? The end user or someone else? In a community for marketers, for example, their employers might be subsidizing the membership. That completely changes who you're selling to and how you retain them.
Competitive and market positioning
Who do you lose deals to most often and what reason do they give?
How long would it take a new entrant to get to where you are today?
What do you have that's hard to copy? Data, relationships, brand, distribution? If the answer is nothing, that obviously tells you something too.
What's changing in the market that worries you most?
When a customer leaves, where do they go? Do they ever come back?
Why are you selling? It's the most obvious question on this list but it's here because the answer is rarely simple. Burnout, a new opportunity, a partnership falling apart. The reason shapes everything from transition risk to how much post-sale involvement you can expect. A seller who's exhausted will hand things off faster but might also be leaving behind deferred problems.
Not all of these apply to every deal. A SaaS acquisition is a completely different conversation than buying a newsletter. But the principle is the same. The questions worth asking are the ones that make the seller think before answering.
If you're buying, use these as a starting point, not a script. If you're selling, go through this list and see how many you can answer right now. The gaps tell you where your prep work is.
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