Due diligence briefer
AI agent skill that evaluates businesses for acquisition with financial analysis and red flag detection. No API keys needed.
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Use when a business owner or investor wants to evaluate a business before buying it. Triggers on: "due diligence on [business]", "should I buy this business", "evaluate this acquisition", "what's wrong with this business", "red flag check", "buying a business checklist". Researches financial health, industry benchmarks, red flags, and negotiation leverage — then delivers a structured briefing with a buy/caution/pass verdict. No API keys or paid tools required — works with web search alone.
SKILL.md
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Due Diligence Briefer
Before you write a cheque, know what you're really buying. This skill transforms a business listing, broker memo, or seller-provided financials into a structured due diligence briefing with red flags, industry context, and negotiation ammunition.
Author: mloki23 | Pipeline: pairs with competitor-intel-briefer for pre-acquisition market context
Minimum Required Inputs
Do not proceed without all 3:
- Business name and industry — what they sell, who they serve
- Key financials — at minimum: asking price, annual revenue, and claimed profit (EBITDA or SDE). If the user only has a listing URL, extract what's available and flag gaps.
- Location — country at minimum; city/state for regional benchmarking
Ask for missing inputs before starting Phase 1. If the user provides a URL (e.g. business-for-sale listing), extract inputs from it first.
Phase 1: Financial Stress Test (15-20 min)
Goal: Determine whether the asking price is reasonable and uncover financial red flags.
1.1 Calculate baseline valuation multiples
Compute using the figures the user provides:
Revenue multiple = Asking Price / Annual Revenue
Profit multiple = Asking Price / Annual Profit (EBITDA or SDE)
1.2 Research industry valuation multiples
Search for typical multiples for the specific industry:
[business industry] business valuation multiples [year]
[business industry] average EBITDA multiple small business
typical revenue multiple for [industry] sale
Cap at 3 searches for 1.2.
1.3 Flag valuation discrepancies
Compare the calculated multiples against industry averages:
- If asking price multiple is >1.5x the industry average: HIGH PREMIUM flag
- If profit multiple >5x for a small business (<$5M revenue): caution
- If seller isn't using a standard multiple (e.g., "asset value only" for a service business): flag the non-standard valuation method
1.4 Check for common financial red flags
Run these specific checks (web-searchable):
[A] "seller's discretionary earnings" OR "add-backs" red flags small business
[B] "working capital" adjustment business sale trap
[C] [industry] revenue concentration risk "customer concentration"
Cap at 3 searches for 1.4.
PROHIBITED during Phase 1: Do not make a buy/caution/pass assessment yet. Observation and calculation only.
Phase 1 Gate — DO NOT proceed until ALL checked:
- Revenue and profit multiples calculated
- Industry benchmark multiples found (at least 1 source)
- Discrepancy flagged if multiple exceeds 1.5x industry average
- Minimum 3 financial red flag areas checked (A, B, C above)
- Summary presented to user: "Here's what the numbers say so far — does this match what you expected?"
Phase 2: Operational & Market Red Flags (15-20 min)
Goal: Uncover non-financial risks the seller isn't volunteering.
2.1 Customer and revenue risk
Search:
[industry] customer concentration risk small business
what happens when key customer leaves [industry] business
2.2 Owner dependency check
Search:
[industry] business owner dependency "key person risk"
buying a business where owner is the brand
2.3 Industry headwinds
Search:
[industry] outlook [current year] challenges risks
[industry] disruption technology regulatory threats
2.4 Competitive pressure check
Search:
[industry] new competitors entering market [current year]
[industry] losing market share to [alternative/disruption]
Cap at 5 searches total across 2.1-2.4.
2.5 Cross-check with competitor-intel-briefer
If the user has run competitor-intel-briefer for this industry, reference those findings. If they haven't, offer: "I can run a competitive intelligence briefing on this industry for deeper context — want me to?"
Phase 2 Gate:
- Customer concentration risk assessed
- Owner dependency risk assessed
- At least 1 industry headwind identified
- At least 1 competitive threat identified
- Red flags compiled into a numbered list presented to user
Phase 3: Negotiation Position & Verdict (10-15 min)
Goal: Deliver the final briefing with a clear recommended action.
3.1 Build the negotiation ammunition list
From Phases 1-2, extract every weakness that weakens the seller's position:
- Over-market valuation
- Customer concentration above 30%
- Owner-is-the-business dependency
- Declining industry or new competitor threats
- Inflated add-backs in profit claims
- Missing working capital in deal structure
3.2 Research recent comparable sales
Search:
[industry] business sold for less than asking price [year]
[industry] business sale "deal fell through" OR "price reduced"
Cap at 2 searches.
3.3 Deliver the final briefing
Output format — save to due-diligence-[business-name]-[YYYY-MM-DD].md:
# Due Diligence Briefing: [Business Name]
**Date:** [YYYY-MM-DD] | **Status:** BUY / CAUTION / PASS
## The Numbers
| Metric | This Business | Industry Avg | Flag |
|--------|--------------|--------------|------|
| Revenue Multiple | X.Xx | X.Xx | [OK/HIGH] |
| Profit Multiple | X.Xx | X.Xx | [OK/HIGH] |
| [Revenue/Profit Trend if available] | | | |
## Red Flags (ranked by severity)
1. **[Red flag]** — [specific detail with source]
2. ...
## What The Seller Isn't Saying
*Pick the 2–3 most relevant to this deal — at least one must be supported by a specific finding:*
- **Walkout risk:** If the owner handles key relationships or is the public face, what revenue leaves with them?
- **Hidden capex:** Equipment age, lease renewals imminent, staff paid below-market (deferred cost bomb)
- **Market timing signal:** Why is the seller selling now — plateau, new competitor, regulatory headwind?
- **Concentration cliff:** What breaks if the top customer, supplier, or contract disappears?
- **Earn-out trap:** Is the asking price padded with performance milestones that depend on the seller's cooperation post-sale?
## Negotiation Ammunition
- [Specific weakness] → use this to push for [specific concession]
- ...
## Verdict: [BUY / CAUTION / PASS]
[2-3 sentence rationale referencing the strongest evidence]
## If Proceeding: First 3 Actions
1. [Specific — e.g., "Request last 3 years of tax returns, not just P&L"]
2. [Specific]
3. [Specific]
---
*Researched via web search. Not financial or legal advice. Hire a
professional for the binding stuff.*
3.4 Ask the closing question
After delivering the briefing: "Want me to run a competitor-intel-briefer on this industry for deeper market context before you decide?"
Phase 3 Gate:
- Negotiation ammunition list has minimum 3 items
- Verdict (BUY/CAUTION/PASS) delivered with rationale
- Output saved to
due-diligence-[name]-[date].md - Closing question asked
Prohibited Behaviours
| Prohibited Action | Why |
|---|---|
| Skip financial ratio calculation | Without numbers, the verdict is opinion, not analysis |
| Exceed search caps (3/3/5/2 per phase) | Anti-loop — compile with what you have |
| Make a verdict without industry benchmarks | A multiple is meaningless without context |
| Present as financial advice | Always include the disclaimer — legal liability risk |
| Skip Phase gate checks | Gates prevent delivering half-researched verdicts |
| Use paid data sources or APIs | Web search only — this is our differentiator |
Quality Standards — Complete When:
- All 3 phases executed in sequence with every gate passed
- Revenue and profit multiples calculated and benchmarked
- Minimum 5 red flags checked across financial and operational dimensions
- Negotiation ammunition has 3+ items tied to specific findings
- Verdict is BUY, CAUTION, or PASS — never "it depends"
- Output file saved with correct naming convention
- Disclaimer included in output
Australian-Aware
If the user provides an Australian business or ABN/ACN:
- Use AUD throughout (skip USD default)
- Search for Australian-specific benchmarks: "Australian [industry] valuation multiples", "small business sale Australia multiples"
- Check for Australian-specific traps: earn-out structures, vendor finance terms, GST on going concern, stamp duty on business assets (state-varying)
- Reference ATO small business benchmarks if relevant
Context Budget
After Phase 1: retain only the calculated multiples, industry benchmarks, and flag list — discard raw search results. After Phase 2: retain only the numbered red flag list — discard individual search outputs. After Phase 3: the briefing file is the artifact. Nothing else from the session needs to be retained.