Buy · 8 min read
Due diligence checklist for buying a small business
A plain-language checklist to help an Australian business buyer organise financial, legal, operational and commercial questions.
Due diligence is the process of testing whether the opportunity matches the story you have been given. The right scope depends on the business, transaction and your circumstances, but a structured checklist helps you identify what is supported, what is uncertain and where qualified advice is needed.
Confirm what you are proposing to buy
Clarify whether the transaction concerns assets, shares or another structure, and list what is included or excluded. Stock, equipment, intellectual property, customer records, licences, online accounts and assumed liabilities should not be left to assumption.
Test the financial picture
- Compare financial statements with tax, bank and point-of-sale records
- Understand revenue concentration, seasonality and recent changes
- Review wages, rent, supplier costs and required working capital
- Identify owner adjustments, related-party transactions and one-off items
- Consider future equipment, maintenance and compliance expenditure
Review the operating dependencies
Understand what the owner does, which employees or suppliers are critical, whether major contracts can transfer and how customers are retained. Review the premises, lease, licences, systems, cybersecurity and business-continuity arrangements that support normal trading.
Use specialists where the risk requires it
A checklist helps organise questions but cannot verify every risk. Appropriate accounting, legal, tax, finance, property or industry advice may be needed before you rely on information, sign an agreement or transfer funds.
BizEX can help you define a buyer brief and prepare the investigation questions. It does not certify seller information or replace independent due diligence.
General information only. Consider obtaining advice suited to your circumstances before making a business, legal, tax or financial decision.