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Checklist
Preparing for due diligence
An investigation goes smoothly when the answers already exist. The work of preparing is finding the questions before the buyer does.
Most findings are avoidable, and the avoidable ones are the expensive ones.
Reconcile
- Reported revenue against bank receipts, month by month
- Platform and marketplace reports against the accounts
- Stock records against a physical count
- Advertising spend against the accounts
Document
- Every normalisation adjustment, with a reference
- Verbal supplier arrangements, confirmed in writing
- Processes that exist only as habits
- The reason behind unusual figures in any month
Secure
- Registrations in the name of the company
- Access to every account held by more than one person
- Backups verified by restoring one
- Licences current and transferable
Anticipate
- The three weakest points, with an honest explanation
- Concentration in customers, suppliers and channels
- Any dependency on the owner personally
- What happens to staff after a transfer
Background reading
- What a due diligence investigation covers (https://www.businessforsale.eu/knowledge-base/due-diligence)