Ops Consulting Before LOI?

March 23, 2026

by a searcher in Denver, CO, USA

I’ve been in conversation with a services business I really like for a variety of reasons but the asking price has been unsupported by the financials and the seller wasn’t willing to get creative in the deal structure - I gave him an IOI anyway in case he changed his mind. Now he’s back and wants to consider my offer but the 2025 financials show a nearly 20% drop in top line revenue - my old offer no longer pencils. Curious if anyone has done a limited (~90 days) operations type consulting engagement with a seller as a means to help the business improve and then decide if a purchase still makes sense. Would love to hear the takeaways, if so. I’m concerned the business has entered distressed territory with a burnt out owner distracted for nearly a year trying to sell. Not opposed to turn around work, but want to assess the damage more closely than a traditional DD period.

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Reply by a professional
in Austin, TX, USA

I’ve seen this a few times and your instinct is right to slow down here. Short answer, yes people do pre LOI operational engagements, but you have to be really careful not to “earn your way into a bad deal” or end up doing free turnaround work with no path to ownership. A couple of things I’ve learned from experience First, a 20 percent revenue drop plus a distracted seller usually means this is no longer the same business you underwrote. I would treat this as a fresh look, not a tweak to your original IOI. Second, if you do a 30 to 90 day engagement, keep it very tight and focused on answering a few key questions Is the revenue decline reversible or structural What does normalized earnings actually look like today What are the 2 to 3 biggest operational blockers to stabilization You are not trying to fix everything, just determine if it is fixable. Third, protect yourself on structure At minimum I would want exclusivity during that period and a clear understanding of how you get to a transaction if things check out If possible, have some alignment on valuation approach or a framework going in And ideally get paid something, even if it is modest, it changes the dynamic Fourth, watch for the real risk which is whether the issues are owner driven or business driven If it is pipeline neglect or lack of focus, that is often fixable If it is customer loss, pricing pressure, or market shift, that is a different story Personally, I think these can be really valuable if you treat them as structured diligence rather than consulting. Go in with a clear hypothesis, pressure test it quickly, and be willing to walk if the story does not hold. Given what you described, your concern about this drifting into distressed territory is probably valid, so getting closer to the operations before committing makes sense, just make sure it is on your terms.

Reply by a professional
from Northern Illinois University in Chicago, IL, USA

Hey, really liked how you’re thinking about this situation. That pre-close sprint approach can be super effective, but I’ve seen it go sideways when the underlying team issues are deeper than expected. In cases like this (burnt-out owner + revenue drop), a lot of the real risk sits in things like who’s actually still engaged, where accountability has slipped, and whether key people are already halfway out the door. Hard to pick that up in a typical DD window. Happy to share how I’ve seen others structure that 60 to 90 day period to actually surface those risks early, especially on the people and ops side.

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