You’ve agreed to terms in a Letter of Intent. Things are moving forward.
Then the buyer’s team starts requesting documents—financials, contracts, spreadsheets, even employee files. It can feel like a lot.
But with the right preparation, you can stay organized, remain in control, and move toward closing without surprises.
At LevelStar, we help Colorado business owners through this phase. Here’s how to stay one step ahead.
What Buyers Want to Confirm
Due diligence is the buyer’s opportunity to verify that what you’ve shared is accurate, complete, and sustainable.
- Financials – Are reported earnings backed by your books?
- Legal – Are there issues buried in leases, contracts, or past disputes?
- Operations – Can the business run without daily owner oversight?
- Compliance – Are taxes, licenses, and obligations current?
Your role: Be organized, responsive, and transparent. That builds trust—and protects value.
Common Documents Buyers Will Request
These are some of the most typical requests—others may be added based on your industry, size, or deal structure.
| Area | Common Requests |
|---|---|
| Financial | Profit & loss statements, tax returns, AR/AP aging, inventory, fixed asset schedules |
| Legal | Articles of incorporation, contracts, leases, IP, litigation history |
| Operations | SOPs, vendor lists, licenses, insurance, equipment logs |
| HR | Employee roster, wages & benefits, contractor agreements |
What the Process Looks Like
Once the LOI is signed, the buyer’s team will begin reviewing your business across multiple areas. You’ll be asked to:
- Upload documents in an organized, digital format
- Respond clearly to follow-up questions
- Remain available for clarification
- Keep business performance steady through closing
We’ll help you organize materials, field questions, and keep momentum going—so diligence doesn’t drag or derail the deal.
In many transactions, buyers may commission a Quality of Earnings (QoE) review—a detailed financial analysis performed by a third-party CPA firm. We’ll help coordinate responses and maintain a clear line of communication if this step is requested.
Common Red Flags—and How to Fix Them Early
| Issue | Why It Matters | Fix Before You List |
|---|---|---|
| Sloppy or inconsistent books | Creates doubt in reported profit | Have a CPA clean up your financials |
| One customer drives most revenue | Buyers worry about client risk | Diversify or secure long-term agreements |
| Personal expenses in P&L | Obscures actual earnings | Provide clear add-back documentation |
| Verbal agreements | Raises legal concerns | Formalize key contracts |
| Unpaid payroll or sales tax | Triggers compliance issues | Resolve and disclose early |
How to Keep the Process Moving Smoothly
- Organize documents before going to market
- Use a secure digital data room with key folders
- Respond quickly and completely to buyer questions
- Maintain business performance during diligence
- Stay in close contact with your broker, CPA, and attorney
Momentum matters. A slow or disorganized process can trigger buyer doubts—and lead to renegotiation.
LevelStar’s Diligence Support—Start to Finish
- Pre-sale checklist of typical buyer requests
- Help setting up a clean, professional data room
- Coordination with buyers, lenders, and attorneys
- Frequent updates
“When sellers are prepared, buyers stay confident—and deals stay on track.”