It’s no secret that asking someone the same question several times has been used by wise people over the centuries. Why might that be? In some cases, it’s to get more in-depth responses, in others, it’s to make sure the answer stays consistent every time. It’s a normal part of the process when you are selling your company.

You’ll note that there are at least three times (and usually several more, depending on the company) when the Seller will be asked for “the same” information. I’ve identified some of those times in the process below.

Steps to Selling Your Business – Getting to Due Diligence

1. Decide if you want to sell and when. What are your goals?
2. Engage your advisor(s).
3. Identify the potential transaction. Inside sale/external/family/etc.
4. Review the process for selling with your advisor. Set the action plan. Who/What/When/How/Milestones etc.
5. Discuss the importance of confidentiality. Set up NDA/Confidentiality Agreement.
6. Share initial information for preliminary valuation range
7. Review initial results for financial and operational opportunities for improvement
8. Establish valuation range
9. Produce/share additional information for analysis and preparation of marketing of the business and pre-due diligence review
10. Research market for the company (local, national, etc.) and prepare Buyer List
11. Prepare the Offering Memorandum (the “Book) and Teaser
12. Market and sell the business.
13. Negotiate price and terms with potential buyers and seller
14. Determine structure of the transaction with tax, accounting and legal advisors.
15. Receive, negotiate and execute LOI
16. Buyer begins the in-depth due diligence process


As an example, one of the first items you will asked for is at least three years of financial statements (P&L and Balance Sheet) in order to get an estimate for a ballpark value/price range for the company.


As you/your advisor prepares the company for sale many additional/supplemental details for the financial statements will be requested. For example, a Trailing Twelve Month (TTM) Income Statement, AR Aging reports to see how quickly the company collects on bills and detailed equipment inventory to understand the quality and age of the fleet and equipment beyond what would be found on the basic balance sheet.


Once you have a Letter of Intent with a potential buyer, you will be asked for a much more in-depth set of information. For some transactions, this might include (among many other possibilities) giving the buyer access to your books via a download of your QuickBooks information and detailed analysis of unusual expenses.

Hopefully, with every new level of scrutiny, you are able to “say that again” in more detail and by sharing the more in-depth levels of information your buyer gains

• A greater understanding of your business
• How well you know and understand your own company
• How honest and upfront you are about possible issues

If an answer you gave early in the process doesn’t match up in the due diligence phase, you will have to explain how (and why) that happened. Hopefully, your advisor would have already been informed (or found the issue themselves if you weren’t aware) and “gotten in front of it” before the buyer surprises everyone. That doesn’t always happen and can either be a “deal killer” or more often results in an adjustment to the purchase price.

As you can see, the due diligence process itself is worth a book in itself so I will be writing more about it in the future. In the meantime, if you have questions or comments, I can be reached anytime via email: [email protected] or phone at 224-688-8838. We’re here to help you harvest your potential.

Ed Laflamme LIC

started his own business from scratch, built it up, sold it and then wrote a book about how he did it. So, he’s been there. He understands your frustrations, worries and concerns. Some of you may want to buy companies, while others may want to sell the one you own. You need expert assessment and guidance before you can move forward. Ed has experience in this area. He is recognized as a CLP: Certified Landscape Professional. Read Ed's full bio.