Practical template
Buying a Small Business Checklist
This practical checklist helps you test an existing small business before paying a deposit, signing a purchase agreement, taking over a lease, or paying a transfer fee.
Use it to organize evidence and unresolved questions. A checked box should mean that you reviewed reliable documents—not that the seller gave a reassuring verbal answer.
Financials
- Reconcile reported sales to bank deposits, tax filings, and point-of-sale records.
- Recalculate gross margin by product or service line.
- Include market-rate owner labor, payroll taxes, maintenance, and missing expenses.
- Test cash flow under lower sales and higher costs.
Lease
- Confirm assignment rights and landlord approval.
- Record base rent, additional charges, increases, deposit, guarantees, and remaining term.
- Check permitted use, exclusivity, repair obligations, and renewal options.
- Confirm that the lease term supports recovery of the purchase price.
Owner dependency
- List the owner’s weekly hours and undocumented tasks.
- Identify relationships, knowledge, sales, and approvals controlled by the owner.
- Estimate replacement labor and transition time.
- Define training and post-closing support in writing.
Staff
- Review roles, pay, tenure, schedules, accrued leave, and contractor classification.
- Identify employees essential to daily operations.
- Confirm whether staff know about the sale and are likely to remain.
- Calculate the effect of wage increases or turnover.
Customers
- Measure repeat purchases, concentration, churn, refunds, and seasonality.
- Separate customer loyalty to the brand, location, staff, and seller.
- Verify contracts, memberships, deposits, and gift-card obligations.
- Test whether demand remains after a price or ownership change.
Hidden liabilities
- Search for unpaid taxes, supplier balances, employee claims, litigation, and regulatory issues.
- Inspect equipment, deferred maintenance, inventory quality, and required repairs.
- Review warranties, refunds, subscriptions, deposits, and prepaid obligations.
- Use qualified legal, tax, and accounting professionals where appropriate.
Transfer price
- Separate inventory, equipment, working capital, and goodwill.
- Value transferable earnings rather than the seller’s effort or original investment.
- Deduct required repairs, missing working capital, and transition costs.
- Compare the price with conservative cash flow and recovery time.
Download / Use this checklist
Use the current free resources page for the available checklist PDF and printable materials. This page is the web checklist; no separate PDF is generated here.
Related tools and reading
Buy an Existing Business Risk Check
Identify the deal assumptions that need evidence.
Business Due Diligence Checklist
Go deeper into financial, lease, operational, and legal review.
Small Business Risk Checklist Template
Use the broader risk template for other commitments.
Buying an Existing Small Business
Use the full book alongside the checklist.
Download / Use This Checklist
Open the existing PDF resources and printable checklists.
Frequently asked questions
Can I download this buying a business checklist as a PDF?
Use the Free Resources page for the currently available PDF checklist and printable materials.
What is the most important item on the checklist?
Verifiable normalized cash flow is central, but it must be reviewed together with lease transfer, customer retention, owner dependency, and liabilities.
Should I rely on the seller’s profit and loss statement?
No. Reconcile it to source records and adjust it for owner labor, unusual expenses, deferred costs, and post-closing changes.
Does this replace professional due diligence?
No. It helps organize the review but does not replace legal, tax, accounting, licensing, or industry-specific advice.