By Nivedita Buzzetta CBI, CM&AP, CEPA

The most successful business transactions take place when sellers are prepared, transparent, and insightful about their businesses. The following Seller Checklist outlines the most common documents and information that buyers will typically request as part of their due diligence. Due diligence is a buyer’s review process to verify the financial, operational, legal, and strategic health of a business before purchasing it.

SELLER CHECKLIST

Financials Readiness

• Last 3 years of tax returns, profit & loss statements, and balance sheets
• Breakdown of discretionary expenses, owner benefits, and owner compensation
• List of assets included and depreciation schedules
• Inventory valuation
• Documentation of liabilities, such as debts and liens
• Working capital requirements to operate

Operational Transparency

• Overview of operations, highlighting key processes
• Standard Operating Procedures (SOPs), if available
• Business plan, if available
• Owner’s role and time commitment
• List of products and services offered and the percentage of revenue each generates
• List of vendors and suppliers, as well as their credit terms and service contracts
• Business licenses and permits required to operate
• Software and technology used in operations

Employee Details

• List of employees with roles, tenure, hours worked, and compensation (payroll, benefits, and bonuses)
• Employment agreements and non-compete clauses
• Key management or employees critical to business success
• Family members working in the business, and if they plan to stay post-transaction

Customers & Revenue

• Breakdown of customer base and revenue concentration
• Customer contracts, subscriptions, or recurring revenue
• Customer retention rates
• Lead generation strategies, such as marketing, advertising, and referral sources
• Seasonal fluctuations or cyclical trends of the business
• Growth opportunities

Legal & Compliance

• Business entity documents and ownership structure
• Lease agreements
• Insurance policies
• Intellectual property (trademark, patents), if applicable
• Compliance with regulatory requirements (industry-specific)
• Outstanding or pending legal, environmental, or other issues

Transition Plan

• Reason for sale
• Timeline for transition and handover
• Willingness to offer training and consulting services post-transaction and compensation required
• Introduction plan for employees, customers, suppliers, and vendors
• Non-compete agreement terms

Selling your business can be a challenging milestone, but preparation can quicken the process and increase the likelihood of a successful and profitable transaction. By gathering all the documents and information listed in the Seller Checklist, you will be well on your way to a successful transaction. 

Contact:
Niv Buzzetta, CBI, CM&AP, CEPA
[email protected]
239.596.8776