Prepare a Business for Buyer Due Diligence
A buyer's questions become easier to answer when the records tell one consistent story. Prepare a practical diligence file before sharing detailed information about the business.
Start with the numbers that support the price
Organise financial statements and tax returns by period. Reconcile differences so you can explain them clearly instead of leaving the buyer to guess.
Create a separate schedule of proposed earnings adjustments. Each item needs a reason and evidence. An owner's personal withdrawal is not, by itself, an additional operating expense to add back.
Build a map of the commercial relationships
List major customers, suppliers, contract terms, and renewal dates. Identify any agreement that may need consent when the owner changes.
Describe concentration accurately. A large account can be valuable, but a buyer also needs to understand the consequences if that customer leaves.
Record assets and obligations together
Prepare equipment, stock, leases, finance arrangements, and known claims. Distinguish assets the business owns from assets it leases or uses with another party's permission.
Include the premises early. A lease that feels informal to the owner may require negotiation before a buyer is willing to proceed.
Describe the business without the owner
Write down your weekly tasks and who can perform them. Include sales, estimating, approvals, customer problems, and specialist knowledge.
A transition plan should describe specific responsibilities and time commitments. Avoid promising to stay indefinitely just to make an early offer sound easier.
Control the sequence of disclosure
Start with a business summary that avoids identifying customers and staff. Work with advisers on confidentiality terms and an organised process for later access.
Do not send tax returns, employee records, or customer files through this website. The valuation form asks only for introductory information so an independent partner can follow up.
Keep the operation steady
Continue serving customers and maintaining records during the sale. Diligence can expose a drop in performance as quickly as it exposes an accounting inconsistency.
Keep a written list of open questions, who owns each answer, and when the response was supplied. That is more useful than making promises the records cannot support.