Most business sales that fall over in Australia fall over during due diligence — usually because the seller wasn't prepared for what was coming. The good news: due diligence is predictable. Buyers and their advisors check the same 50–80 items every time.
This article is the complete checklist, organised the way buyers actually approach it. Walk through it 90 days before going to market and you'll save weeks of pain (and potentially the deal itself).
Section 1 — Financial due diligence
The buyer's accountant will spend most of their time here. Be ready with:
- 3 years of accountant-prepared P&L and balance sheet
- 3 years of tax returns (lodged, with copies of NOAs)
- 3 years of BAS lodgements
- 12+ months of bank statements (all business accounts)
- Add-back schedule with documentation for each item
- Year-to-date management accounts (within 30 days)
- Aged debtors and creditors as at recent date
- Stock valuation method + recent stocktake
- Director loan account reconciliation
- GST and PAYG reconciliation
The biggest red flag for buyers is when bank statements don't reconcile cleanly with P&L. If there are reasons (cash sales, related-party transactions, etc.), document them upfront rather than letting the buyer discover them.
Section 2 — Operational due diligence
- Customer list with revenue concentration (top 10 by % of sales)
- Major customer contracts (signed copies)
- Major supplier contracts and key relationships
- Employee list with roles, salaries, employment dates, status (FT/PT/casual)
- Employment contracts (signed)
- Operations manual or documented processes (if available)
- Equipment list with condition and approximate values
- Vehicle list with finance status
Section 3 — Legal due diligence
The buyer's lawyer will pull threads on:
- Lease (signed, with all variations and option exercises)
- ASIC search of the company
- PPSR search for security interests over business assets
- Trademarks, business names, domain names — proof of ownership
- Licences and permits (food, liquor, trades, transport — whatever applies)
- Insurance policies and claims history
- Pending litigation, disputes, or warning letters
- ATO debts, super obligations, payroll tax compliance
- Any related-party loans or transactions
Section 4 — Industry-specific items
Depending on your industry, expect additional checks:
- Hospitality: Council compliance, food safety records, liquor license transfer eligibility, lease and outgoings
- Trades/construction: Builder's licence, insurance certificates, WIP/contracts in progress, supplier credit terms
- Health/medical: Practitioner registrations, AHPRA compliance, patient records data sovereignty, Medicare provider arrangements
- Retail: Stock turnover, supplier exclusivity arrangements, e-commerce platform ownership, customer data privacy compliance
- Professional services: Client retention rates, professional indemnity coverage, partner agreements, fee structures
Want a head start?
My free Sale Readiness Checklist covers all 40 items buyers actually check — across financial, operational, legal, and personal dimensions.
Get the Free Checklist →How to organise it (the data room)
Most buyers expect a "data room" — a single shared folder (Google Drive, Dropbox, or a dedicated platform like Datasite for larger deals) where they can access everything you've disclosed. Set this up properly:
- Folder structure mirrors the checklist above. Section 1 - Financials, Section 2 - Operational, etc.
- Watermark sensitive documents. Customer lists, IP, source code — all should be watermarked with the buyer's name and a "confidential" label.
- Track access. Note who downloaded what and when. Useful if the deal falls over.
- NDA before access. No exceptions. Get a signed NDA from anyone — including the buyer's advisors.
- Keep a "single source of truth." If the version in the data room and the version on your laptop differ, the data room version wins. Update both at the same time.
Time-saving prep you can do now
Even if you're not selling for 12 months, do these things now:
- Get 3 years of accountant-prepared financials sorted (request from your accountant)
- Build the add-back schedule (work with your accountant on owner expenses)
- Find the lease + all variations
- List all licences and renewal dates
- Trademark anything material — typically takes 4–6 months to register
- Resolve any outstanding ATO debts or compliance issues
- Document your top 5 processes (even rough Google Docs are fine)
Each of these takes hours rather than weeks. Spread them over 6 months and you'll be 80% sale-ready when you decide to list. The 40-point checklist PDF covers everything in detail.