Buyer's Checklist

  1. Uncover seller motivation
    Ask for a written statement of reason for sale. Cross-check with business performance trends.
    Resource: BizBuySell Guide: Why Owners Sell
  2. Obtain and analyze full financials
    Request 3 years of tax returns, P&Ls, and bank statements. Use financial analysis software (e.g., QuickBooks, Xero) to spot inconsistencies.
    Resource: SBA Due Diligence Checklist (PDF)
  3. Verify revenue and customer base
    Ask for customer lists, top 10 client revenue, and supplier contracts. Use LinkedIn or Apollo.io to verify key customers exist.
    Resource: HubSpot Guide: Customer Due Diligence
  4. Assess key staff and owner dependency
    Request an org chart and employee tenure list. Interview key staff (with NDA).
    Resource: Exit Planning Institute: Reducing Owner Dependency
  5. Check legal, regulatory, and compliance issues
    Hire a business attorney to review all contracts, licenses, and pending litigation. Use state business registry and UCC search to check for liens or lawsuits.
    Resource: LegalZoom: How to Check for Business Liens
  6. Review lease and real estate terms
    Obtain a copy of the lease. Negotiate assignment or extension with landlord.
    Resource: NOLO: Commercial Lease Checklist
  7. Conduct operational due diligence
    Shadow operations for a day. Review SOPs, inventory, and vendor contracts.
    Resource: Lucidchart: How to Map Business Processes
  8. Model post-acquisition cash flow
    Build a 12-month cash flow projection using Excel or LivePlan. Include debt service, working capital, and transition costs.
    Resource: LivePlan Cash Flow Forecasting
  9. Negotiate contingencies and holdbacks
    Propose earn-outs, seller financing, or escrow holdbacks in the LOI. Use sample LOI templates and consult with your M&A attorney.
    Resource: BizBuySell: Sample LOI
  10. Plan the transition
    Draft a transition plan covering training, introductions, and digital asset handover. Use a transition checklist and calendar key milestones.
    Resource: SCORE: Business Transition Checklist (PDF)