Here’s a truth most sellers don’t hear until it’s too late:

Due diligence isn’t about confirming your business is great.

It’s about finding reasons not to buy it.

When a buyer’s team goes into due diligence, their lawyer and financial advisor have one job: Protect the buyer — by uncovering every red flag, risk, and crack in the foundation.

The Real Goal of Due Diligence

You might think due diligence is just paperwork — a formality before the deal closes.

But in reality, it’s the buyer’s last chance to poke holes in your business and decide:

• Should we really do this?
• Is this worth the price?
• What’s wrong that they haven’t told us?

It’s a process designed to surface reasons to walk away — or negotiate the price down.

The lawyer is looking for legal liabilities.

The CPA is hunting for hidden financial risks.
And the buyer is watching to see how you respond under pressure.

What They’re Really Looking For

• Sloppy books or unexplained financial swings
• Legal exposure from unpaid taxes, old contracts, or employment issues
• Owner dependency (aka: “This place falls apart without you”)
• Verbal promises not backed up by clean documentation
• Inconsistencies between what you said… and what they find

Even small issues can create doubt — and doubt leads to delays, price drops, or deal fatigue.

How to Make Due Diligence Less Painful

Start cleaning that up now. The earlier you fix weak spots, the fewer surprises during diligence.

Quick Win: Do a “Pre-Diligence Drill”

Pick one area: legal, financial, or operations.

Have your CPA, attorney, or trusted advisor review it as if they were on the other side.

Ask:

• What would make you nervous?
• What’s missing or unclear?
• What needs fixing or documenting?

Start there.

Want to be ready before the buyer’s team starts digging?

Download the free Exit Toolkit — and prep like a pro before they ever open your books.