Operational Due Diligence · Lower-Middle Market
Know what breaks after close, before you close.
Ledgerstone Advisory delivers fixed-scope operational due diligence for lower-middle-market acquisition buyers. We assess operational transferability risk so you can price issues before close and stabilize faster after Day 1.
The gap
What other workstreams miss
We all know QoE, legal, and tax are necessary. But they don't fully tell you where a business can survive hidden operational risk.
They tell you what the numbers are. We tell you what breaks when the owner walks out. That's the real question, and it is usually the one that determines whether Day 1 goes smoothly or doesn't.
Four lanes
What we assess
- Key-person dependency Who holds critical relationships, institutional knowledge, or operational authority that doesn't transfer with the business? Where are the points of failure? How exposed are you?
- Workflow and process fragility Are core operating processes documented? When you take over, are they repeatable and survivable? Informal knowledge drives small business operations.
- Systems and technology readiness Do existing tools, integrations, and data infrastructure support Day 1 operations under a new owner? Where do transition dependencies create timeline risk?
- Supplier concentration and input dependency Supplier concentration and geographic dependency can create hidden continuity risk. We help buyers determine whether that risk is deal-breaking or manageable before close. We specialize in China and tariff-induced risk assessment.
Engagements
How we engage
01 — Red-Flag ODD Scan
5 business days · Fixed fee · One memo, one readout
Rapid assessment of operational transferability risk for buyers in active diligence. Red/yellow/green asignals, five killer questions for management, and the three most likely repricing points.
Scope: people dependency, workflow fragility, systems readiness, supplier concentration flags.
Exclusions: legal opinions, tax advice, QoE, valuation, implementation.
Contact02 — Operational DD Sprint
2–3 weeks · Fixed fee · Artifact-heavy output
Full operational diligence workstream for buyers who need inspectable deliverables before close. Outputs include a supplier concentration map, key-person dependency analysis, workflow fragility assessment, systems readiness review, and a first-100-day risk memo.
Scope: same four lanes as above, with greater depth and documentation.
Exclusions: legal opinions, tax advice, QoE, valuation, implementation.
Contact03 — Post-Close Advisory
Earned, not sold upfront
For deals that close and where the pre-close work identified fixable issues, we offer targeted post-close advisory: dual-source roadmap, supplier remediation prioritization, and documentation hygiene for lenders and customers. Engaged only where the pre-close relationship warrants it.
This engagement is not available without a prior pre-close engagement.
Fit
Who we work with — and who we don't
We work with
- •Independent sponsors and searchers in active diligence on U.S.-based operating businesses.
- •Lower-middle-market PE firms and holdcos who need operational transferability clarity before close.
- •Private credit and direct lenders who need an operator-level view on whether a business can sustain debt service through a transition.
- •QoE firms and M&A advisors who need a specialist referral when operational risk requires deeper scope than their workstream covers.
We do not take on
- •Open-ended consulting retainers.
- •Implementation or remediation work during pre-close diligence.
- •Engagements where the output is expected to serve as a legal opinion or regulatory filing.
- •Deals where the buyer has not completed or is not concurrently completing financial diligence.
- •Businesses outside the U.S. operating context.