Due diligence starter checklist
The first-pass request list across financial, legal, operational, and customer diligence — organized so nothing obvious slips.
When to use it: Module 8 (Due diligence). Use the day your LOI is signed — send the document request within 48 hours while momentum is high.
Professional review: A starter list, not a substitute for a QoE provider, attorney, and CPA. Their job is depth; this list makes sure breadth happens.
Financial
- ✓3 years of financial statements (P&L, balance sheet, cash flow) plus year-to-date.
- ✓3 years of business tax returns — reconcile against the P&Ls; ask about every gap.
- ✓Monthly P&L for the trailing 24 months (seasonality and trend).
- ✓Bank statements for the trailing 12 months — tie revenue deposits to the P&L.
- ✓Support for every add-back in the CIM.
- ✓AR and AP aging reports as of today.
- ✓Payroll register: who earns what, tenure, and any owner family members.
Legal & compliance
- ✓Entity documents, ownership, and any liens (UCC search).
- ✓Lease: term, renewal options, assignment/change-of-control clause, landlord consent path.
- ✓Licenses and permits — which ones transfer, which must be reapplied for, in whose name.
- ✓Material contracts: customers, suppliers, equipment — check change-of-control clauses.
- ✓Pending or threatened litigation, warranty claims, regulatory actions.
- ✓Insurance: policies, claims history for 3 years.
Operations & customers
- ✓Customer concentration: revenue by customer for 3 years — anything over 10% gets a plan.
- ✓Revenue by service/product line — what is actually growing or shrinking.
- ✓Key employee census: roles, tenure, comp, and who might leave at closing.
- ✓Owner dependence inventory: every task, relationship, and password only the owner holds.
- ✓Equipment list with age and condition — what needs replacement in 24 months.
- ✓Systems: what runs the business (scheduling, invoicing, CRM) and does it survive the owner leaving.
Log every finding as resolved, accepted, or open — an unresolved critical issue is a price conversation or a walk-away, never a hope. Track deadlines on your Today page so nothing slips inside exclusivity.
Put it to work
The free Academy pairs each template with a module, a working tool, and a saved artifact — readiness, buy box, screens, and the rest of the source-to-decision loop.
Educational material only — not legal, lending, tax, or investment advice. Have your attorney, CPA, and lender review anything you sign or send.