There is no fixed diligence timeline in Canadian small-business M&A, which means the questions asked on the first call are what actually decide how much diligence a target earns — not a template that runs the same way every time.
Key takeaways
A first call with a vendor is inexpensive in a way that formal diligence is not, and the questions asked on it determine how much of that later spend is actually justified. The following ten, asked roughly in this order, are built from the diligence and pricing material this hub has already sourced — each is checkable, none requires a signed NDA to ask, and together they surface most of what a buyer would otherwise only learn weeks into a paid engagement.
Start with why the owner is selling, and listen for specificity rather than a rehearsed answer — retirement, health, partner disputes and burnout are all common and legitimate, but a vague or shifting answer is itself information. Follow immediately with what does not show up in the financial statements: personal expenses run through the business, one-time settlements, or related-party arrangements “including rent paid to a property the owner also owns” are all named, common items that a seller may not volunteer unprompted. (deavo.ai/insights/reading-financial-statements-before-you-buy)
Ask directly what share of revenue comes from the largest few customers, and separately, which of those relationships would survive the owner leaving. Customer or supplier concentration is one of deavo’s own five named reasons a sale underdelivers on price, showing up in practice “as a lower offer or as earn-out and holdback terms tied to whether those relationships survive the change of ownership.” (deavo.ai/insights/five-mistakes-that-lower-your-sale-price)
Ask whether last year’s books are finished and whether current-year interim statements exist. “Starting too late” — “last year’s books unfinished, no interim statements” — is named directly as one of the five mistakes above, and it is a fact a seller can simply state rather than one that requires document review to confirm. Ask, separately, for two to three years of historical financials plus current-year interim figures, matched against what was actually filed with CRA and for GST/HST — the core of deavo’s own first-time-buyer checklist. (deavo.ai/insights/due-diligence-checklist-first-time-buyers)
Ask about the lease term, renewal options, and whether it carries a change-of-control clause — a fixture of the same checklist and one of the more common ways a deal is delayed late, not early. Ask, too, what other consents the deal needs: a franchisor, a key supplier contract, a landlord, or a lender on existing debt. A general legal answer here is useful groundwork — legal diligence generally asks “what obligations and risks come with this business,” distinct from the accountant’s question of “what does this business actually earn, owe, and hold.” (treadstonelaw.ca, legal vs financial due diligence) Knowing early which consents are needed is often what actually drives how long the deal takes, more than the deal size itself.
Ask directly about any pending or threatened litigation, and any arrears with CRA, a landlord, or a supplier. Then, if a deal report or information package already exists, ask what it covers and treat its contents as the start of the question list rather than the answer to it — a deal report “is not a valuation and is not a guarantee that the numbers will hold up,” and the platform hosting it explicitly “does not prepare, verify, or vouch for the accuracy” of what is inside. (deavo.ai/insights/reading-a-deal-report-whats-inside) How well-organized (or not) the answer to this question turns out to be is itself informative about how the rest of diligence will go.
There is no fixed timeline for diligence on an Ontario business purchase — “anyone who quotes you a fixed number before knowing your specific deal is guessing” — and complexity, record organization and third-party consents are what actually drive how long it takes. (treadstonelaw.ca, how long due diligence takes) That is exactly why these ten questions matter more as a sequence than as a checklist to be worked through in any order: the answers to the first six (why sell, what is off the P&L, concentration, books) tell a buyer roughly how much diligence this specific target is going to need, and the last four (lease, consents, litigation, deal report quality) tell a buyer roughly how long it is going to take — both of which should shape the diligence budget before it is spent, not after.
Not every weak answer is a reason to end the call. A vague answer to “why are you selling” is worth a gentle follow-up rather than an immediate red flag — some owners genuinely have not articulated it to themselves yet, particularly early in a process. A hard stop is different: a seller who refuses to say whether the books are current, or who will not name the share of revenue from the largest customer even in general terms, is refusing to answer questions that cost nothing to answer honestly. That refusal, more than any single fact it might be hiding, is the signal worth acting on — either by asking again more directly before investing further time, or by moving on to a target whose owner is willing to have a plain conversation before any money has changed hands.
A buyer runs all ten questions on a first call with the owner of a commercial cleaning company asking $780,000. The owner cites retirement plainly and consistently. Two items run through the business personally — a vehicle lease and a portion of the owner’s cell phone — both volunteered without being pressed. The top three customers make up roughly 35% of revenue, all commercial contracts the owner says a site supervisor manages day to day, not the owner personally. Books are current through the prior month. The lease has eighteen months remaining with one five-year renewal option and no change-of-control clause. No pending litigation, no arrears. No formal deal report exists yet. On this call alone, nothing here rules the target out, and nothing here is a reason to skip a scoped diligence engagement — but the answers already tell the buyer that customer-relationship verification (does the site supervisor really run these accounts, or does the owner) is the one item worth prioritizing early, rather than treating all ten areas as equally uncertain going in.
Related: spotting a business that is being sold too late, reading three years of statements in an hour, and what a buyer should refuse to sign in an NDA.
Most of them can be asked before, since they concern general facts rather than the specific confidential figures an NDA is meant to protect — reason for selling, book status, and lease structure rarely require a signed agreement. Detailed financial figures and named customer contracts more often wait for an NDA; see what a buyer should refuse to sign in an NDA for what that agreement should and should not restrict.
That is itself useful information, though it should not be over-read on its own — some sellers are simply cautious with a buyer they have just met. A pattern of vague answers across several of these ten, rather than one guarded response, is the more meaningful signal.
A short call is enough to walk through how to sequence these ten for the specific target you’re looking at.
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