What is a CIM, and how much of it can you believe?
A CIM is the packet a broker sends once you have signed an NDA: the story of the business, its numbers, its customers and the reason for selling. It is a sales document written by the seller's agent, and nothing in it has been verified by anyone.
What is inside one
- A description of the business, its history and its market
- Recast financials — usually three years, adjusted with add-backs to show SDE
- Customer and revenue mix, sometimes anonymised
- Staff, equipment, a lease summary, and the reason for sale
- The asking price, and occasionally the multiple it implies
Read it as a claim sheet
Every number in a CIM is the seller's or the broker's assertion. That is not an accusation — it is how the document works. The financials are recast, not audited; the "growth opportunities" are ideas, not pipeline; the reason for sale is the version chosen for buyers. Your job is to turn each claim into something a document can settle.
The five things to reconcile first
| Claim in the CIM | What proves or breaks it |
|---|---|
| Revenue | Tax returns and bank deposits for the same periods |
| SDE and the add-back schedule | The line-by-line schedule, with evidence for each item |
| "Diversified customer base" | Revenue by customer for three years — concentration hides in averages |
| Rent and premises | The actual lease: remaining term, options, assignment clause, who the landlord is |
| Owner works "part time" | Payroll records, and a straight question about hours and duties |
The tells worth noticing
- Adjusted figures without the unadjusted ones. If SDE appears but net profit does not, ask for both.
- Periods that do not line up. A trailing-twelve-month figure beside two calendar years, chosen because it flatters.
- A reason for sale that does not survive one follow-up question.
- No mention of the lease at all in a business that cannot move.
None of this means the deal is bad. It means the CIM is the start of diligence rather than evidence — and the distance between those two is where first-time buyers lose money.
Questions buyers ask
Are the financials in a CIM audited?
Almost never on a Main Street deal. They are recast statements prepared by the seller or the broker and adjusted with add-backs, and no independent party has verified them. Reconcile them to tax returns and bank statements before relying on any of it.
Should I sign an NDA to get a CIM?
Signing a broker's NDA to receive a CIM is normal practice. Read what it restricts — some agreements bar you from contacting the seller's customers, employees or landlord, which changes how you can run diligence later.
Related
- Seller's Discretionary Earnings (SDE) — SDE is what a small business earns for one full-time owner-operator: net profit before tax, plus that owner's pay and benefits, plus interest, depreciation and amortisation, plus expenses that will not exist after the sale.
- Add-backs — Add-backs are expenses a seller adds back to profit on the argument that they will not exist for the new owner.
- Letter of Intent (LOI) — A letter of intent sets out the deal you and the seller believe you have agreed: price, structure, what is included, and how long you get to verify it.
Checking a real deal? DealLoupe reads the documents a seller gave you and reports the red flags, the gaps and the questions to ask — before you spend anything on due diligence. See what a pre-screen costs →
Last updated: 2026-08-22