Buyers Due Diligence Items Of Confidential Company Information 

1. 3 years Corporate, (1120, or 1120S) or personal (1040) (sole proprietorship) tax returns. 
2. Monthly bank statements and reconciliation, canceled checks 
3. Sales tax returns, Profit and Loss Statements totaling 3 years. 
4. Detailed year end and a year to date general ledger. 
5. All of the last 2 years corporate intangible and tangible tax returns (DR-601 and DR -405) 
6. Annual and Quarterly, both federal and state payroll tax returns for 2 years and any 1099's issued to date. 
7. work in process, accounts receivable, inventory and accounts payable for 2 years and to date. 
8. List of purchase assets with values and serial numbers, including inventory list. 
9. Employee list with job description and salary, wages etc. 
10. Purchase and sales invoices for specific jobs for a sample test gross profit. 
11. Copy of existing lease, options, addendums. Landlord contact person, and previous real estate tax bill. 
12. Copy of all licenses
13. Bank statements and records

Buyer's Ten Commandments

I - Thou Shall Not Be Greedy! Sellers deserve a fair price for the years they have spent developing their Business. Be prepared to pay for the goodwill of the business.

II - Thou Shall Have A Good Reason For Buying! Buying a business is hard work, it takes commitment. Spend time deciding why you want the responsibility of owning a business.

III - Thou Shall Provide Background Information! Have a resume and financial statement ready. Many business transactions have the seller providing financing and like the bank they want to know you can run the business.

IV - Thou Shall Keep An Open Mind! There are no perfect businesses.

V - Thou Shall Keep In Mind Tax Benefits! Depreciation and Interest Expenses are benefits after taxes.

VI - Thou Shall Offer A Reasonable Down Payment! A low down payment indicates a lack of commitment.

VII - Thou Shall Realize Businesses Are Prices On Profits! A business with good profits and little assets can expand with little capital outlay later.

VIII - Thou Shall Be Prepared To Meet The Landlord! Have your resume and financial statement because the landlord does not benefit by transfer of the business in most cases.

IX - Thou Shall Remember Time Is Of The Essence! After terms have been met and a contract signed quickly proceed to closing.

X - Thou Shall Avoid Surprises! Disclose pertinent information now. Avoid destroying your credibility. 

VALUATION TOOL - Discounted Value Excel Worksheet - Click Here 
(note: this is a Microsoft Excel spreadsheet, and you will need Excel installed on your computer to correctly view it.)