Glossary · Reading the business
Operational risk analysis
In short
An assessment of potential threats to a business's daily operations, such as over-reliance on a single customer, supplier, or key employee. It identifies vulnerabilities that could impact future cash flow.
What it means in a deal
This is a critical part of your due diligence. Identify any single points of failure: Does one customer represent too much revenue? Is the seller the only one with critical knowledge? Understand these risks and formulate a plan to mitigate them post-acquisition to protect your investment and ensure stable cash flow.
Related terms
Common questions about Operational risk analysis
- What if the franchisor requires specific operational changes that impact the business's profitability?
- Can an SBA 7(a) loan cover ongoing operational costs like rent or utilities?
- Is working capital from an SBA loan available immediately at closing for operational expenses and payroll?
- What constitutes prudent lending standards for SBA 7(a) underwriting regarding credit analysis?
- If I am buying a business where I was previously an employee, does my operational experience count?
- What if a proposed franchise agreement includes a clause restricting the borrower's operational control or management?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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