Once a buyer is serious, they verify everything you’ve told them. Due diligence is where confidence is confirmed or quietly lost — and where many sales collapse or get re-negotiated downward. The owners who sail through are the ones who did their own due diligence first.
What due diligence is
It’s the buyer’s structured investigation of your business before they commit — verifying the financials, the legals, and the operations match the story. Expect it to take several weeks, and to be thorough.
Financial records
Have at least three years of clean financial statements, tax returns, and management accounts ready, plus an explanation of any unusual items. The normalisations behind your valuation need to hold up to scrutiny.
Legal and contracts
Gather leases, supplier and customer contracts, licences and permits, intellectual property, insurance, and any litigation history. Anything verbal, expired or unassignable will surface here — better to find and fix it before the buyer does.
Operations and people
Document how the business runs, your employee records and entitlements, key dependencies, and your systems. This is where owner dependence shows up — so the work you did to reduce reliance on yourself pays off again.
Run your own due diligence first
Vendor due diligence — reviewing your own business through a buyer’s eyes — lets you resolve issues on your timetable, not under deal pressure. Honesty here builds the trust that keeps a deal alive; surprises are what kill it.
Build a simple data room
Organise everything into a single, well-structured set of folders — financial, legal, operational, HR. A tidy data room signals a well-run business and speeds the process. An adviser or broker can tell you what buyers in your industry expect to see.
This guide is general information only and does not take account of your personal circumstances. It is not financial, tax or legal advice. Speak to a qualified adviser before acting.