Selling a business is one of the most complex yet important transactions you’ll ever navigate. Long before you sign a Letter of Intent, buyers will want to see that your company’s records are organized, complete, and transparent. This state of readiness is crucial to ensure a smooth and rewarding outcome for all.
The Due Diligence process gives potential buyers a detailed look into your operations, finances, and legal standing. The more prepared you are, the more likely you’ll preserve your company’s valuation.
To help you stay organized, we’ve created this simplified Pre-Due Diligence checklist:
1. Financial Statements – Current and Forward-Looking
- 3–5 years of accurate, GAAP-compliant financial statements
- Year-to-date financial statements and monthly reports
- 3 years of forward-looking earnings projections, with assumptions
- Reconciled bank, credit card, and loan statements
- Cash flow statements, historical and forecasted
2. Tax Records
- Federal, state, and local returns (3–5 years)
- Proof of any resolved or ongoing tax disputes
3. Legal Documents
- Articles of incorporation, bylaws, shareholder agreements
- Business licenses, permits, and registrations
- Contracts with customers, suppliers, and partners
4. Operational Data
- Employee roster and compensation details, including Management team
- Key vendor and customer lists
- Current inventory data
5. Intellectual Property
- Trademarks, patents, copyrights, and domain ownership
- Licensing agreements
6. Liabilities & Commitments
- Outstanding debts and obligations
- Any pending litigation
7. Systems & Processes
- Documentation of workflows and systems
- Details on software, licenses, and subscriptions
Your Next Steps
At Ludwig Business Consultants, we’ve supported multi-million-dollar M&A transactions from both the buy and sell side. We help clients organize their records, strengthen their financial story, and anticipate the questions buyers will ask, making the due diligence process faster, smoother, and more profitable.
If you’re considering buying or selling a business, we can help you get transaction-ready. Let’s start the conversation today.
