Buying a business is one of the most consequential decisions you’ll make. Use this checklist to stay organized and avoid the traps that catch first-time buyers. Bring in your attorney, CPA and lender at the stages noted — this list doesn’t replace them.
Stage 1: Before you look
- Written buy box: industry, location, size in words, owner situation, skills you bring. See acquisition criteria.
- Personal finances organized and a realistic view of how much equity you can bring.
- Conversations started with a lender about acquisition financing. See how to finance a business acquisition.
- Attorney and CPA identified.
- Clear reason why you want to own a business — and what you’ll do as the owner.
Stage 2: First look
- What does the business do, for whom, and why do customers choose it?
- How long has it operated, and how have results trended?
- Why is the owner selling?
- How many employees, and who are the key people?
- How involved is the owner day to day?
- Does it fit your buy box?
Stage 3: Questions to ask the seller
- Why are you selling, and why now?
- Walk me through a typical week — what do you personally do?
- Which customers would call you personally if there were a problem?
- Who are your most important employees, and do they know about the sale?
- What would you invest in or change if you were staying?
- What keeps you up at night about the business?
- What are the biggest risks a new owner should know about?
- How long would you be willing to help after closing?
- Are you open to carrying part of the price?
- What would make this a successful sale for you, beyond price?
Stage 4: Documents to request (typically after an NDA)
- Several years of financial statements and tax returns.
- Current-year interim financials.
- Bank statements to tie revenue to deposits.
- Add-back schedule with support.
- Customer list summary (concentration, tenure), often anonymized early.
- Employee roster with roles and tenure (no personal details yet).
- Lease and key contracts.
- Licenses and permits.
- Equipment and asset list.
- Any pending legal matters.
Stage 5: Evaluate and offer
- Earnings normalized and understood. See seller’s discretionary earnings.
- Owner dependence assessed honestly.
- Financing structure sketched with your lender.
- Letter of intent drafted with your attorney. See letter of intent.
Stage 6: Due diligence
- Financial diligence: returns tie to statements tie to bank deposits. See financial due diligence.
- Legal diligence: entity, contracts, leases, licenses, liens, litigation. See legal due diligence.
- Operational diligence: how work gets done, systems, team, customers. See operational due diligence.
- Red flags investigated. See red flags when buying a business.
- State-specific steps (in South Carolina, a DOR certificate of compliance). See buying a business in SC checklist.
Stage 7: Financing and documents
- Lender approval and conditions met.
- Purchase agreement negotiated with your attorney. See business purchase agreement.
- Asset vs stock structure decided with CPA and attorney. See asset sale vs stock sale.
- Transition and non-compete terms agreed.
- Insurance, banking, payroll and licenses ready for day one.
Stage 8: Closing and the first week
- Funds, documents and ownership transfer complete.
- Employee announcement planned with the seller. See keeping employees after acquisition.
- Key customer introductions scheduled. See keeping customers after buying a business.
- Hundred-day plan ready. See first 100 days after buying a business.
Using the checklist well
Don’t treat it as a box-ticking exercise. Each item is a question that can change the deal: the price, the structure, the transition terms or whether you buy at all. Keep notes on what you learned at each stage, and revisit your buy box when a deal pulls you away from it.
When to walk away
Walking away is part of buying well. Good reasons include earnings that don’t verify, a seller who won’t provide basic documents, undisclosed liabilities, key employees or customers who are clearly leaving, or financing that only works if everything goes perfectly. Most experienced buyers walk away from many more deals than they close. That discipline is what protects you from the one deal that would have hurt you.
Next steps
For the full buyer’s guide, read how to buy a business. If you’d like an operator’s eyes on a deal you’re evaluating, talk to me about acquisitions.
Questions people ask
What should I look for when buying a business?
Consistent, verifiable cash flow; a business that doesn’t depend entirely on the owner; diversified and loyal customers; a capable team likely to stay; documented processes; transferable contracts, licenses and leases; manageable risks; and a clear reason the seller is selling.
What questions should I ask when buying a business?
Why are you selling? How does the business really run day to day? Which customers and employees depend on you personally? What would you change if you were staying? What are the biggest risks? What documents can you provide? How long will you help after closing?