Deal stages · Before you buy
What should a buyer check during small-business due diligence?
Published · Reviewed by The Diligence Standard Team · Updated
The scope should follow the acquisition thesis and the risks of the specific business. Begin with claims that drive price and repayment, then test customers, people, assets, contracts, compliance, cash needs and transferability.
A realistic transaction story
A buyer used a generic checklist for a commercial laundry. The folders were complete, but the review gave little attention to machine age, utility usage and lease obligations. Those business-specific items mattered more than several standard corporate documents.
What the evidence changed
A long checklist created activity without focusing first on the facts that drove value and continuity.
What to check
- Write down the exact claim and who supplied it.
- Ask what was independently tested, by whom and under what scope.
- Rank diligence requests by potential effect on earnings, cash, legal exposure, transfer and the decision to close.
- Translate any unresolved gap into cash, price, terms, timing or a decision not to proceed.