The P&L can tell you how a business performed. It can’t tell you how the business actually works. During an acquisition, the financials matter. But some of the biggest opportunities and risks are buried in the operation. A healthy EBITDA number won’t necessarily tell you: • How dependent the business is on a few key employees • Where tribal knowledge lives • Whether processes are repeatable or held together by workarounds • Where capacity constraints exist • How engaged the workforce is • Whether the owner is quietly holding everything together These things may not show up clearly in the financials today, but they can have a significant impact on performance after the acquisition. Financial diligence tells you what the business produces financially. Operational diligence helps you understand **how it produces those results and whether they are sustainable. For those who have acquired a business: What operational issue did you discover after closing that you wish you had identified during diligence?