Research
Business Acquisition Due Diligence Checklist
January 2026
8 min read
Before signing a purchase agreement, thorough due diligence is essential. This checklist covers every area you should investigate when acquiring a small business.
1Financial Documents
3+ years of federal and state tax returns
3+ years of profit & loss statements
3+ years of balance sheets
YTD financials (within 60 days)
Accounts receivable aging report
Accounts payable aging report
Inventory valuation report
Fixed asset schedule with depreciation
Bank statements (12 months)
Credit card statements (12 months)
Debt schedule with terms and balances
2Operations
Employee roster with tenure, roles, and compensation
Organization chart
Employee contracts and non-competes
Vendor list with contract terms
Customer list (anonymized if needed pre-LOI)
Top 10 customers by revenue
Customer concentration analysis
Standard operating procedures (SOPs)
Equipment list with age and condition
Technology and software inventory
Key process workflows
3Legal & Compliance
Entity formation documents
Operating agreement or bylaws
Business licenses and permits
Insurance policies (GL, WC, E&O, etc.)
Pending or threatened litigation
Past litigation and settlements
Environmental compliance records
Intellectual property registrations
Franchise agreements (if applicable)
Non-disclosure agreements with employees
Material contracts and agreements
4Real Estate & Facilities
Lease agreement with terms and renewal options
Landlord contact information
Rent payment history
Property inspection report
Zoning verification
Environmental site assessment (if needed)
Utility costs (12 months)
Maintenance records
5Market & Competition
Competitive landscape analysis
Market size and growth trends
Industry regulations and changes
Customer reviews and reputation
Marketing materials and brand assets
Website analytics (traffic, conversions)
Social media presence and engagement
Pricing strategy documentation
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