The due diligence checklist is a major obstacle buyers have to pass through when purchasing your small-sized business. Some sellers call it the business equivalent of colonoscopy. However, this process can be turned into smooth sailing with some forward planning.

One of the first steps to prepare for selling is to develop a comprehensive and thorough due diligence checklist. The best time to do this is before prospective buyers begin asking questions in order to ensure that the required documents are easily accessible whenever a buyer calls.

Although every business has its own information requirements, there are a number of universal documents that most companies will need to gather and submit for due diligence:

These include financials and records, legal documents including marketing and sales information, intellectual property, patents and management as well as human resources. Being organized and prepared can significantly expedite the due diligence process and reduce the time required to put together a deal.

Other important factors to consider for due diligence checklists are:

The scope of due diligence prior to the start to avoid the over-allocation of resources and identifying the most crucial risks in advance. This will allow for a prioritized framework of risk assessment and a targeted mitigation strategies. In addition the use of a due diligence checklist with the function of a date stamp makes it easy to check at a glance whether the data has been updated recently. This prevents unnecessary delays caused by sending out outdated information.

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