Acquisition Notes

Small business M&A, plainly

Due diligence

Diligence is not an audit. It is a search for the specific things that would change your mind about the price or the deal.

Financial

Reconcile reported revenue to bank deposits and tax filings. Look at monthly trends rather than annual totals — a year can look flat while the last two quarters fall.

Legal and contractual

Check whether key customer contracts, the lease and licences survive a change of control. Some assign freely, some require consent, and a landlord or major customer with a consent right has leverage over the deal.

Operational

Talk to staff where the process allows it, and understand the systems the business actually runs on. Undocumented processes in one person's head are a real liability even when nothing is wrong with the numbers.