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How to Sell a Business: Due Diligence
About Due Diligence
When a buyer makes an offer on your business, there is a period of time that follows where the buyer researches your business and further investigates your business. This period of time “typically” lasts 2-4 weeks and is called “due diligence.”
Typical document requests and items investigated by buyers during this time period can include the following:
- Financial Statements
- Tax Returns
- Bank Statements
- Leases – premise lease, equipment leases, etc.v
- Any third-party contracts, such as supplier or vendor contracts
- Sales and Use Tax Reports
- Staffing- and payroll-related documents: job descriptions, employment contracts, etc.
- Insurance-related documents: workers compensation, health insurance, liability insurance, etc.
- Equipment inspection
- Licenses and permits
- Marketing, advertising, and promotional documents
- Environmental documents and inspections
- Franchise related documents
The list above will not be typical for every business. Every business will have its own unique due diligence structure.