What should I ask about a video production company’s retainer clients and monthly deliverables?
Ask for every retainer agreement, what each client receives each month, and how long they have stayed. Then check how much of the revenue comes from the largest few clients, and whether the monthly work is actually being delivered on time and on scope.
Begin with the paperwork. For each retainer, read the scope, the monthly deliverables, how changes are handled, the notice needed to end it and who signed. A retainer that can be cancelled on short notice is steadier on paper than in practice.
Next, test delivery. Ask to see the last few months of work for several clients against what was promised. Are videos arriving on time? Are clients asking for extra rounds that the retainer does not cover? Overservicing eats margin quietly, so ask how much time each retainer really takes.
Look at concentration. If two or three clients provide most of the recurring revenue, find out how they came to the studio, who their contact is and whether that relationship is with the owner personally. Ask how many retainers ended in the last couple of years and why. Finally, speak to a couple of retainer clients if the seller allows it. Ask what they value, whether they plan to continue and what a new owner would need to keep. Your accountant can help you read the recurring revenue properly. Ask too whether any retainer prices have not moved for a long time.
Key takeaways
- Read each retainer for scope, change handling and the notice needed to end it.
- Compare promised monthly deliverables with what has actually been delivered.
- Check how much revenue sits with the largest few clients.
- Ask why past retainers ended and speak with current clients if allowed.
Related reading
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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 CanadaGovernmentWhat are the steps to buying a business?
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