When selling my business, what kind of information will I have to provide to the prospective buyers?

When you decide to sell your business, the buyer will want lots of information so they can make an educated assessment about the value of your business.  This process is called Due Diligence.  For the seller, the due diligence process can be more invasive than applying for a mortgage while getting a colonoscopy.  While you have likely kept many of the details of your business private for as long as you owned it, you now need to open up everything for the prospective buyer.

While every due diligence process is different, the buyer will usually ask for at least the following:

  • 3-5 years of financial statements
  • 3-5 years of tax returns
  • Employee census data including salaries and increases over the last several years
  • Employee responsibilities by individual
  • Role/responsibilities of the owner
  • Owner compensation and perks over the last 5 years
  • Client data
  • Details about products and services
  • Legal information about the company and the owners
  • Forecasts and budgets for the coming years
  • And any other information that they feel is relevant to the business

When providing this information, you need to be as open and forthright as you can because if something comes up in their research that you didn’t disclose, it could blow up the whole deal and possibly cause you legal trouble of your own.

So if you decide to sell your business to have to bear your soul.  You will feel like you have gone through the ringer by the time you are done.  There is really no topics that are off limits for a prospective buyer to ask about.


Michael Giuffrida from Southington CT has been operating businesses since 1997.  He is an experienced entrepreneur in business management, profitable growth, business valuation, mergers and acquisitions, and information technology managed services.

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