What should I ask about an AV company’s long-term corporate clients?
Ask for a client list ranked by revenue, with the start date of each relationship and the terms it runs under. Find out who inside each client chooses the AV supplier and whether a contract or tender cycle is coming up. Then ask whether the key clients have been told about the sale.
Start with concentration. Sort clients by what they paid over a full year and see how much sits with the top few. A company that depends on two or three corporate clients is carrying a different risk from one with many smaller accounts.
Next, look at the terms. Ask whether work is covered by a signed agreement, a standing purchase order or just repeat requests. Read what each says about renewal, notice and pricing, and whether any contract can be passed on to a new owner without the client’s approval. Your lawyer should read the main ones.
Then find the decision makers. Who at each client picks the supplier, and do they deal with the owner personally? Ask how work is won again: a quote each time, a preferred list or a periodic review. Ask also about payment speed, since large clients can pay slowly and a long wait for money strains a small supplier. Ask whether any client has recently asked for a lower rate or a rebid. Finally, ask how and when the seller will introduce you to the main contacts.
Key takeaways
- Rank clients by revenue and see how much the top few represent.
- Read the terms for renewal, notice and transfer on the main contracts.
- Identify who chooses the supplier and how work is won again.
- Plan introductions to key contacts with the seller, ideally before the sale is final.
Related reading
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Selling
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentAccounts receivable
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