Customer and contract due diligence assesses the quality and sustainability of the revenue the seller presented. Revenue numbers tell you what happened in the past; customer and contract analysis tells you what will happen in the future under your ownership.
Customer Concentration Analysis
Request a customer revenue report showing each customer's contribution to total revenue for the most recent 12 months. Identify the top 10 customers by revenue. Calculate what percentage of total revenue each represents. Any customer representing more than 15–20% of revenue represents meaningful concentration risk. For those customers, understand: Is there a contract in place? How long have they been a customer? What is their relationship with the current owner vs. the business itself?
Contract Review and Assignment
For each material customer contract, review: the term and expiration date, renewal provisions (auto-renewal vs. active renewal required), pricing terms, termination for convenience clauses, assignment provisions (can the contract be assigned to a buyer with or without customer consent?), and any exclusivity or non-solicitation provisions. Contracts that require customer consent to assign are the most vulnerable in a sale — identify these early and plan your approach to securing customer consent as part of the transaction.
Customer reference calls — conducted under NDA and timed appropriately in the due diligence process — provide the most valuable qualitative information about revenue sustainability. A customer who describes their relationship as primarily with the current owner (rather than with the business) is a retention risk that should affect your valuation analysis.
Recast Seller’s Discretionary Earnings, then apply a planning multiple for this Illinois business. Replacement labor is subtracted. This is a planning tool, not an appraisal.
Before debt, working-capital peg, holdback, and tax. Educational only.
What this Illinois guide is for
Customer and Contract Due Diligence in Business Acquisitions is a working answer for owners and buyers. We will not invent a statewide average sale price. We will show the earnings math, the Illinois clocks that delay a close, and the questions a serious counterparty will ask.
Marketplace context from BizBuySell’s Q2 2026 Insight Report (median reported sale $349,250, 2.7× cash-flow multiple, 14% of owners with a professional valuation) is context — not your quote.
Illinois diligence that is not optional
Three years of tax returns, bank statements that match the P&L, the lease, licenses, customer concentration, and any environmental file belong in the first data room. See the buy-side checklist.
Documents to gather this week
- Three years of signed business tax returns and matching P&Ls
- Year-to-date P&L, balance sheet, and three months of bank statements
- Current lease, amendments, and a plain-English remaining term
- License and permit list, including who holds each card
- Top-customer concentration (names redacted until an NDA)
A simple Illinois close calendar
Plan six to twelve months from cleanup to close on a prepared Main Street deal. Start CBS-1 and any Chicago or Cook notices at letter-of-intent, not the week of funding. Landlord consent often takes longer than the lender.
Related pages on this site
Educational only — not legal, tax, or a formal appraisal. Confirm bulk-sale notices, licenses, and tax allocation with counsel and a CPA.
Questions
No. This is education and planning math. A professional opinion of value is a confidential conversation. We work on a success fee if you engage a sale process. There is no file-upload portal.
Start with adjusted seller’s discretionary earnings, then a vertical planning band. A marketplace average is context, not your quote.
Personal professional licenses do not transfer. Municipal registrations and state notices have their own calendars. Confirm the path before you grant exclusivity.
Most prepared Main Street sales take about six to twelve months from cleanup to close. License transfers, landlord consent, and SBA underwriting add weeks.
CBS-1 is the Illinois bulk-sale notice. File it at least ten business days before an asset transfer that meets the statute. Late filing can put Illinois tax risk on the buyer.