A first-pass CIM checklist for a self-funded search
Separate the seller's figures from your assumptions before choosing the next step.
A first pass ends with a decision about the next conversation. Keep it short enough to repeat, with a source beside each figure.
Write your buy box first
Record the sector, geography, size, and operating role you want. Name the constraints that would make you pass. Keep those criteria visible while you read the confidential information memorandum, or CIM.
Keep the earnings label and period
Copy the seller's label exactly: seller's discretionary earnings, EBITDA, or adjusted EBITDA. Record the period and source page. Ask for the reconciliation and support for each add-back before adopting the figure in your own case.
The SEC's EBITDA guidance distinguishes EBITDA from adjusted measures in public-company reporting. Use that distinction to ask how the seller calculated the number, without assuming those reporting rules apply to this private business.
Annotate one earnings claim
Synthetic example. The business, figures, and page references below are invented.
Cedar Service Co. fits your sector and geography. Its CIM reports 2025 SDE of $520,000 on page 12, including an $80,000 family-payroll add-back.
Seller claim: $520,000 of SDE. The CIM supplies no payroll support for the adjustment.
Buyer assumption: exclude that $80,000 while testing the case. The resulting $440,000 is an illustrative sensitivity, not verified earnings or cash available to you.
Open question: who performs that work after closing, and what would replacement cost?
Next step: Ask first. Request the payroll detail and the proposed transition duties from the broker.
Keep both figures with their labels. A page reference identifies the claim's source. It does not establish that the claim is true.
Record the cash and financing unknowns
List your assumptions for compensation, working capital, maintenance spending, financing terms, and transaction costs. Mark missing inputs as unknown.
If you expect SBA financing, discuss the case with a lender. The SBA's 7(a) guidance requires creditworthiness and an ability to repay, and directs applicants to lenders. A CIM screen does not establish eligibility or approval.
Choose a next step
Use Pursue when the initial fit warrants more work. Use Ask first when a specific answer could change your decision. Use Pass when the deal conflicts with your criteria, and record why.
Give any question an owner and a follow-up date. You now have a screen you can revisit when the broker responds.