A systematic approach to verify all critical aspects of a business before acquisition, reducing risk and ensuring informed decisions.
Due diligence is the comprehensive investigation process that every business buyer should complete before finalizing an acquisition. It's your opportunity to verify all claims made by the seller, uncover potential risks, and validate your investment decision.
According to research, over 65% of acquisition failures can be traced back to inadequate due diligence. Our framework helps you avoid becoming part of this statistic by providing a systematic approach to examining every aspect of the business.
of failed acquisitions
due to poor due diligence
Our comprehensive 28-page guide includes:
Complete checklist covering 8 critical business areas
Document request templates for sellers
Red flag indicators that require special attention
Verification procedures for each category
Timing guidelines for efficient due diligence
Expert tips from experienced business buyers
Format: 28-page PDF (4.2 MB) • Last updated: October 2023
Our checklist is designed to be adaptable to businesses of all sizes and industries. Here's how to get the most value from it:
Verify financial statements, tax returns, cash flow, and revenue claims
Review contracts, licenses, permits, and potential legal liabilities
Evaluate processes, systems, equipment, and operational efficiency
Investigate customer concentration, relationships, and satisfaction
Review supplier relationships, terms, and supply chain risks
Assess key employees, culture, compensation, and HR compliance
Verify physical and intellectual property assets and condition
Analyze competition, industry trends, and growth potential
Our comprehensive 28-page guide with:
Introduction & Framework
Page 2
Financial Verification Checklist
Page 7
Red Flags & Warning Signs
Page 14
Trust but verify - Always independently verify key claims, especially regarding finances and customers
Watch for trends - Historical data should show consistent patterns or explainable changes
Talk to customers and employees - First-hand accounts often reveal insights that documents can't show
Look beyond financials - While numbers are important, culture, operations, and market position are equally vital
M&A Advisor, Former Business Broker
Michael has facilitated over 150 business acquisitions and developed this framework based on real-world transactions across multiple industries.
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