Owners preparing for a conversation with a buyer usually prepare the wrong things. They assemble turnover history, they polish the brand story, they photograph the roastery. All reasonable, and none of it is what the conversation turns on.
What follows is what I look at, and what I would expect any serious buyer to look at. It is not a complete diligence list and it deliberately contains no thresholds — businesses differ and so do the reasons for buying them. It is the set of things that genuinely change how a roastery is regarded, in the order they tend to matter.
Contracted volume against transactional volume
The first question, always. How much of what you sell is committed — a supply agreement, a standing order, a contract with a term — and how much is somebody choosing you again each month?
Two businesses with identical turnover are completely different propositions if one has a book of agreements with notice periods and the other has a large number of customers who could stop on Friday. The first has revenue with a floor under it. The second has a track record, which is not the same thing.
This is worth knowing about your own business regardless. Most owners have never counted it.
Customer concentration
What share of your volume is your largest customer? Your largest three?
High concentration is not automatically bad — a long-standing agreement with a hotel group is a real asset — but it changes what is being bought. A business where forty per cent of volume sits with one account that has thirty days' notice is a business with a single point of failure, and that will be reflected in structure and in terms.
The related question, asked less often but mattering as much: who owns that relationship? If the answer is you personally, concentration and owner dependency compound.
Gross margin per kilo, not percentage
Percentage margin is the figure owners quote and it is the less informative one. Gross margin in money per kilo tells you what the business earns for each unit of work it does, and it is comparable across products, channels and businesses in a way percentages are not.
It also surfaces things percentages hide. A retail bag at a high percentage margin and a low absolute contribution may be consuming more labour per kilo than a wholesale line at a lower percentage and double the contribution. A lot of small roasteries are busiest in their least valuable channel.
Expect to be asked for this by line and by channel. Expect it to be the point at which many conversations slow down, because a surprising number of businesses cannot produce it.
Owner dependency
Covered at length elsewhere, and it belongs on this list because it is frequently the single largest factor. What happens if you are unavailable for three months? If the honest answer is that the business degrades quickly, that shapes everything downstream — the structure, the terms, how much of any deal is contingent, and how long you stay.
Quality of earnings
Not whether the business is profitable, but whether the profit is real and repeatable.
That means: what is in the numbers that will not recur, and what is missing that should be there? Owner remuneration below market. Family members on or off the payroll. Personal costs run through the business. A year flattered by a one-off. Equipment that has been repaired rather than replaced and will need replacing.
None of these is a problem and every small business has some of them. They just need to be identifiable, because a buyer is trying to work out what the business earns on a normalised basis, and undisclosed items found later cost more trust than they ever cost money.
Equipment, lease and approvals
The practical layer, easy to overlook and capable of stopping a transaction.
What condition is the equipment genuinely in, and what is the service history? What does the lease say, how long does it run, and can it transfer? Are the municipality approvals and food safety documentation current and in the right entity's name? Is the intellectual property — the brand, the marks, the website — actually owned by the company rather than by you personally or by a designer who never assigned it?
Problems here are usually fixable. They are considerably cheaper to fix before a conversation than during one.
What is not on the list
Worth saying, because owners spend time on these.
Brand story matters to customers and barely at all in diligence. Awards are pleasant and change nothing. Social media following is not a proxy for anything. And headline turnover, on its own, tells a buyer almost nothing — a business with strong contracted volume and clean margins is a better proposition than a larger one without them, every time.
How to use this
If you are years from any conversation, this list is a work programme. Every item on it is something you can improve, and improving them makes the business better to own whether or not it ever changes hands.
If you are closer than that, the useful exercise is to go through it honestly and identify where you would struggle to answer. That is the list of things to fix, and it is almost always shorter than owners fear — most of what makes diligence painful is not the state of the business but the fact that nobody has ever assembled the answers.