Before any buyer spends six weeks and five figures on real diligence, they spend about ten minutes deciding whether to spend the six weeks. Every experienced acquirer runs some version of this fast pass, usually on the first summary financials you share after the NDA, and businesses get sorted into three piles before the coffee cools: pursue, pursue with concerns, pass politely. Knowing exactly what happens in those ten minutes is close to knowing your own future, so here’s the screen, in the order the eyes actually move.
Minute one to three: revenue mix
First look, always: how much of the revenue is contracted and recurring versus project-based and hopeful. A buyer flips to revenue by category and computes one ratio, and you already know why: recurring revenue predicts its own future, and everything else has to be re-earned. Above 70% contracted MRR, the reader relaxes. Below half, the business gets mentally reclassified from “managed services company” to “project shop,” and everything after gets read through that lens.
What sellers miss is that the screen also checks whether you know your mix. An owner whose summary cleanly breaks out contracted MRR, project, T&M, and product resale reads as someone who runs the business by the numbers. An owner who sends one undifferentiated revenue line reads as someone whose diligence will be archaeology.
Minute three to five: client concentration
Second look: the top-ten client list as a percentage of revenue. One client over 20% is a flag every buyer notices, and over 30% is the most common reason a deal that should have happened doesn’t, or happens at a price that stings. The buyer isn’t being dramatic. They’re pricing a coin flip: if that client leaves in year one, does the deal still work?
The screen version is a single glance at the top line of the client table. If it’s fat, the buyer’s next thought is structure (“how much of the price can I make contingent on that client staying?”), and you’ve just learned where your earnout came from, months before anyone proposes it.
Minute five to seven: contracts and terms
Third look: what actually binds the revenue. Multi-year agreements with auto-renewal and assignment clauses are load-bearing walls. Month-to-month arrangements and handshakes are furniture. The screen question is what fraction of the MRR sits on paper that survives a change of ownership, because a contract that can’t be assigned to the buyer is, for deal purposes, a warm feeling.
Tenure rides along in the same glance. A client base whose average relationship is eight years tells a story no sales deck can fake, and it partially offsets other concerns. Long tenure with weak paper reads better than short tenure with strong paper, and long tenure with strong paper is what premium multiples are made of.
Minute seven to nine: the earnings sanity check
Fourth look: margins and owner economics, roughly. Gross margin on services near or above 50% says the shop prices properly and staffs sensibly. Meaningfully below that says the eventual quality-of-earnings review will be eventful. The buyer also eyeballs the owner’s compensation and perks to guess the size and cleanliness of the addback schedule, and whether reported earnings will survive normalization.
No one computes anything precisely at this stage. The reader is asking one question of the whole page: do these numbers hang together, or does something not add up? Numbers that don’t reconcile at a glance don’t kill interest, but they convert enthusiasm into caution, and caution shows up later as structure and price.
Minute nine to ten: the owner
Last look, and the least numerical: how involved are you? The org chart (or its absence) gets one scan for a second-in-command, a service manager, anyone whose existence means the business runs when you fish. “Owner is the senior engineer and handles all key accounts” is the single most expensive sentence in the deck, because the buyer just watched the earnings walk out the door with you at closing.
And quietly, the buyer is screening you as a counterparty: whether your asking expectations are near reality, whether the materials suggest you’ll be organized in diligence, whether the reason you’re selling makes sense. Deals are months of working together, and the screen includes a gut read on what those months would be like.
Using the screen on yourself
Here’s the practical part. Everything above is checkable on your own business, this week, by you, for free. Pull your revenue by category, your top-ten client table, your contract file, your service gross margin, and your org chart, and grade each one the way a stranger with a checkbook would. The exercise takes an afternoon and produces something valuable: a ranked fix list, ordered by what buyers see first.
Then notice the timing implication. Every item on the screen moves slowly. Mix shifts take quarters, concentration takes years, contracts migrate one renewal at a time, and a second-in-command takes a hiring cycle plus a year of credibility. That’s the case, made again from a new angle, for starting the work two years before you sell: the ten-minute screen is written over twenty-four months.
If you’d rather not grade your own homework, we run this exact pass with owners as the first step of a no-obligation conversation, and we’ll tell you which pile your business lands in today and what would move it. Buyers will run the screen on you eventually. Better to have run it first.