When a buyer signs a Letter of Intent, they’re not committing to buy your business, they’re committing to look under the hood.
Due diligence is the stage where curiosity turns into investigation. Everything you’ve claimed so far needs to hold up under scrutiny. And if it doesn’t? That’s when deals stall, prices drop, or buyers walk away.
Here’s what you can expect buyers to ask for, and why being ready can make the difference between a smooth close and a slow, painful unraveling.
They’ll Dig Into Your Numbers
Expect a request for detailed financial statements going back three to five years, along with tax returns, general ledger entries, and current balance sheets. They’re not just verifying revenue, they’re looking for trends, margins, and anything that hints at instability.
If your books are messy or you’ve got personal expenses buried in there, now’s the time to clean it up. The more organized and transparent your numbers are, the more credible you look.
They’ll Want to Understand Your Revenue Base
Buyers will ask for customer lists, contract details, and revenue by client. They’ll check if you’ve got a healthy spread of customers or if one big account could sink the business if it left.
If there’s concentration risk, be prepared to explain why that relationship is stable. If you’ve got long-term or recurring contracts, make sure they’re front and center, those are gold in a buyer’s eyes.
They’ll Look at How the Business Actually Runs
Who does what? How are decisions made? Are there written processes? A buyer will want to see org charts, employee rosters, job descriptions, and vendor agreements. They’re picturing the business without you in it, if it collapses in that scenario, they’ll think twice about moving forward.
Documented systems and capable people in key roles make a big difference here.
They’ll Check for Legal and Compliance Risks
Licenses, permits, intellectual property, leases, supplier contracts, and any history of disputes, all of this will be reviewed. Buyers don’t want to inherit unresolved legal problems or find out the business is operating in a grey area.
If there’s anything that could be a sticking point, disclose it early. Surprises are deal killers.
Why You Can’t Treat This as “Just Paperwork”
Due diligence isn’t busywork, it’s the moment a buyer decides if they trust you and your business enough to close. Gaps, delays, or inconsistencies plant seeds of doubt that can grow quickly.
The sellers who sail through this stage are the ones who’ve done the work before a buyer even shows up. They can hand over a clean, organized package that answers questions before they’re asked.
If you’re thinking about selling in the next few years, get your due diligence file together now. It’s the single best way to keep your deal, and your price intact once a buyer starts asking questions.
At Capital Link, we help business owners avoid the last-minute scramble and go to market with confidence. The time to prepare isn’t when the buyer is knocking. It’s today. Book a free consultation