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Check a small business before you buy it
Give it the listing and the books. Get a checklist, seller questions, owner earnings and a value range.
Check a small business before you buy it is a free AI workflow for the job "Handle money and investing". It guides your AI through several skills in order, passing each step's output to the next.
Free · No account · Made by AI Blocks · Level: advanced · Thinking: high
What it does
Small businesses are sold on a story and a spreadsheet the seller prepared. The buyer sees the revenue, hears about the loyal customers, and pays for profits that include the owner's unpaid labour and leave out the truck that needs replacing. This workflow checks the business in order. It builds a diligence checklist for this kind of business: what to ask for, what to verify, what a red flag looks like. It prepares your meetings with the seller, with the questions and the answers to listen for. It reads the statements as an analyst would: trends, margins, what is unusual, what is missing. It works out owner earnings, in Warren Buffett's definition: reported earnings plus non-cash charges, minus the money the business must spend to stay as it is. Then it gives a value range to offer from, with the method shown.
You give it
- The listing and what the seller claims
- The financial statements, two or three years if you can
- What you know of the industry and the location
- After the meetings, the seller's answers (optional)
- Your results (optional)
- Your question (optional)
You get
- A diligence checklist for this kind of business, with red flags
- Meeting questions with the answers to listen for
- A read of the statements: trends, margins, oddities and gaps
- Owner earnings and a value range to offer from, with the method shown
Use it when
- A broker sent you a listing and you are tempted.
- You are buying from a retiring owner who keeps the books in their head.
- You have bought before and found the surprises after closing.
Steps
- Due diligence checklist builder: Describe the deal and sector. Get a request list by workstream with status tracking and red flag notes.
- Diligence meeting prep writer: Name the meeting and company. Get sharp questions, benchmarks and red flags to probe.
- Financial statement analyst: Give it your numbers. Get ratio analysis, a valuation, budget variances and a rolling forecast.
- Owner earnings calculator: Paste a company's profit, depreciation and spending. Get the cash an owner could take out each year, as a range.
- Business value range calculator: Paste a business's owner earnings. Get a no-growth floor value and low, middle and high growth values, with what each assumes.
How to use it
- Download the handoff pack. It's a zip with HANDOFF.md and every skill file this workflow uses.
- Give the folder to Claude (in Claude Code, or as files in a Claude Project) and say "Follow HANDOFF.md".
- Paste the listing and the statements. It builds the checklist and the meeting questions.
- Meet the seller. Paste what they said and any new documents.
- Read the statement analysis, the owner earnings and the value range before you make any offer.