Capex history & deferred maintenance

What it is

A look at how much the business has actually spent on equipment, facilities, and infrastructure over time, set against what's been deferred — the maintenance and replacement a new owner will inherit the moment they take over.

Why it matters

An owner easing toward retirement often stops reinvesting years before a sale, because every dollar not spent on capex is a dollar that shows up as profit instead. The SDE (seller's discretionary earnings) number looks great right up until the new owner has to replace the walk-in cooler, the delivery trucks, or the aging POS system all at once — an expense the purchase price never accounted for.

What to look for

• Capex spending trending toward zero in the one to two years before the business was listed
• Equipment still in daily use well past its typical useful life
• No maintenance logs, service records, or documented equipment history
• Facility or lease conditions that will need near-term investment regardless of who owns the business