Operations Due Diligence

Key Person Risk

The danger that the business depends too much on one person, often the owner or one top employee. Why it matters: This gives owners a clearer way to understand buyer questions, advisor comments, and negotiation tradeoffs during a sale process.

Related terms

Advisor

A professional who helps with the sale, such as a broker, M&A advisor, CPA, attorney, or investment banker. Why it matters: The right advisor can help prepare materials, explain tradeoffs, manage buyers, reduce surprises, and keep the owner from negotiating complex deal terms alone.

Buyer

The person, company, investor, or fund trying to buy the business. Why it matters: Different buyers value different things, so knowing the buyer type helps an owner understand likely questions, risks, financing needs, and negotiation style.

More from Operations Due Diligence

Contractor Employee Classification Employee Handbook Exempt Employee Management Team Non-Exempt Employee Organizational Chart Owner Dependence Retention SOPs Standard Operating Procedures Stay Bonus

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