Service level agreement (SLA)

Most small businesses run on informal expectations. A managed IT provider, a commercial cleaning company, or a logistics operator, though, often has SLAs written directly into its customer contracts, and those commitments do not disappear because the business changed hands — the new owner inherits the obligation to meet them along with the revenue the contract produces.

What to check before buying a business with SLAs in place

• What the actual standard is, and whether current operations are consistently meeting it
• What the penalty or remedy is for a missed SLA — a credit, a discount, or a right to terminate
• Whether meeting the SLA depends on a system, a vendor, or a person that might not transfer cleanly
• Whether the SLA is tied to a data-handling or security commitment, which raises the customer’s exposure as well as the business’s

Why this belongs in diligence, not just the contract file

An SLA that has quietly been missed for months is a liability sitting off the balance sheet, and a buyer who does not ask will inherit it without knowing. Confirming actual performance against the promised standard, not just reading the clause, is what turns this from a paperwork review into a real risk check.