Buyer Due Diligence Checklist for Small Business Acquisitions

A thorough due diligence process protects capital and uncovers post-acquisition growth potential.

1. Financial Due Diligence: Review 3–5 years of federal tax returns, audited or reviewed financial statements, monthly P&Ls, and cash flow trends. Verify all owner add-backs (discretionary earnings, personal expenses, one-time items).

2. Legal & Regulatory Diligence: Inspect corporate governance records, leases, IP ownership, customer and vendor contracts, litigation history, and regulatory compliance.

3. Operational Diligence: Evaluate key employee retention risks, standard operating procedures, vendor dependencies, technology infrastructure, and supply chain resiliency.

4. Commercial & Customer Diligence: Analyze customer churn, concentration risks, pricing power, and competitive differentiation.

Using a centralized due diligence platform like ExitVelocity keeps both buyer and seller aligned, tracks outstanding document requests, and ensures no critical items slip through.