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Diligence guides

What each item on the standard due-diligence checklist means, why it matters, and what to look for — the start of numanknows' acquisition learning hub.

Financial

  • 3 years of tax returns reconciled to P&L
  • QoE (quality of earnings) on add-backs over $50k
  • A/R aging & bad debt history
  • Customer concentration (top 10 = ?%)
  • Revenue churn / customer count trend
  • Working capital target peg
  • Capex history & deferred maintenance

Operations & People

  • Org chart + comp by role
  • Key-person risk + retention plan
  • Owner's calendar audit (where does the time go?)
  • Lease & assignability
  • Tech stack / systems inventory
  • License / certification transferability (CPA, contractor, etc.)

Deal & Financing

  • SBA pre-qualification (Live Oak, Pursuit, Huntington, Newtek)
  • Seller financing willingness
  • Non-compete & transition period (90-180 days standard)
  • Working capital + transition consulting agreement
  • Indemnity, escrow, R&W coverage
  • UCC, lien, litigation search

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