Preparing for Due diligence

Preparing for Due diligence

Is everything as it should be?

Every potential buyer of your business will go through a due diligence process to evaluate your business and make sure everything is as it should be.

You can help speed this process along by collecting certain information that buyers tend to ask for ahead of time. Below is a list of the common things potential buyers will ask you to show them. Exactly what you get asked for will depend greatly on your business and industry, as well as your buyer, but you can consider the list below a good starting point, and there’s certainly no harm in collecting more information than you need to.

When it comes to due diligence, you can’t be over prepared.


Organisational information 

You should have your formation or incorporation documents, any bylaws or operating agreements, as well as agreements between owners of the equity interests. Up-to-date board minutes and notices for equity owner and board meetings are also useful to collate.


Financial records 

These include detailed profit and loss statements, balance sheets, and annual reports. You should also be able to provide management accounts on a monthly basis that includes profit and loss statements, balance sheets, aged debtors and aged creditors.

Material contracts

Material contracts include customer contracts, supply agreements, insurance policies, loan and other financing agreements, and employment contracts as well as any marketing and advertising agreements.


You will need to share information regarding employees, their wages, any benefit plans, bonus compensation, vacation, sick time, and any policies. It is also important to comply with GDPR so no names of employees should be given the documentation supplied to buyers until the deal is complete.


Intellectual property 

If you have documentation supporting any copyrights, trademarks, trade names, or patents then make sure you have them to hand.


Honesty is the best policy

This one is pretty obvious, we know, so it should come as no surprise that we believe being up front and honest throughout the process of selling your business is absolutely the best policy.

Apart from the fact that it’s unethical, buyers are savvy people, and they’ll likely find out any truths you’re hiding throughout the due diligence process, anyway.


This article originally appeared as part of the Ultimate Guide on in August 2020. Other articles from the guide can be found via the links below:


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