Purchased Assets
Create an explicit asset schedule instead of assuming that everything used by the business is included. Domains, repositories, source code, content, trademarks, customer data, analytics properties, ad accounts, email lists, social profiles, supplier relationships, licenses and software subscriptions can have different owners and transfer rules.
Confirm control and transferability before closing. Check registrants, account administrators, contractor agreements and relevant license terms. Where an asset cannot transfer directly, identify the replacement process, cost and downtime risk. Credentials should be transferred through a controlled handover rather than informally shared in advance.
Plan acceptance tests for important assets. After transfer, confirm that domains resolve, applications run, analytics collect data, payment flows work and the buyer has administrative control. The purchase agreement and closing checklist should reflect assets that are genuinely critical to continued operation.
Excluded Assets
Create an explicit asset schedule instead of assuming that everything used by the business is included. Domains, repositories, source code, content, trademarks, customer data, analytics properties, ad accounts, email lists, social profiles, supplier relationships, licenses and software subscriptions can have different owners and transfer rules.
Confirm control and transferability before closing. Check registrants, account administrators, contractor agreements and relevant license terms. Where an asset cannot transfer directly, identify the replacement process, cost and downtime risk. Credentials should be transferred through a controlled handover rather than informally shared in advance.
Plan acceptance tests for important assets. After transfer, confirm that domains resolve, applications run, analytics collect data, payment flows work and the buyer has administrative control. The purchase agreement and closing checklist should reflect assets that are genuinely critical to continued operation.
Purchase Price
Valuation begins with a consistent earnings base, not a multiple pulled from a headline. For smaller owner-operated businesses, Seller’s Discretionary Earnings may help show cash flow available to one working owner; EBITDA is more common as businesses become larger and management compensation is treated differently. Normalize the chosen metric before applying any range.
A multiple is shorthand for many underlying judgments. Growth quality, customer and channel concentration, margins, recurring revenue, owner workload, defensibility, documentation and transferability can all affect how buyers view the same dollar of earnings. Comparable transactions are useful context only when the businesses and deal terms are genuinely comparable.
Build a range and test scenarios rather than presenting a single precise answer. Consider the cash paid at closing as well as financing, earnouts, working capital and transition obligations. The economically attractive deal is not always the one with the lowest headline multiple.
Representations
Define what this step is meant to prove before collecting documents. Good diligence connects a claim to evidence, identifies what remains uncertain and asks whether the issue can materially affect future cash flow or transferability.
Compare the current state with historical patterns. One month or one screenshot rarely tells the full story. Look for trends, exceptions and dependencies, then ask the seller to explain material changes with evidence that can be independently checked where practical.
Record the conclusion and its effect on the deal. Some findings simply confirm the thesis; others change valuation, transition planning or transaction terms. The purpose is a better-informed decision, not paperwork for its own sake.
Closing Conditions
Transaction documents should describe the commercial deal clearly enough that both sides understand what is being bought, how payment works and what must happen before closing. Definitions matter: ambiguity around assets, liabilities, working capital, transition support or performance conditions can become expensive after the excitement of negotiation has passed.
Distinguish business terms from legal effect. An LOI can record major commercial points while leaving some provisions non-binding, whereas the definitive purchase agreement allocates detailed rights and obligations. Escrow instructions should match the actual transfer sequence and acceptance conditions.
General templates are useful for issue spotting but cannot account for every jurisdiction, tax position or deal structure. Material acquisitions and sales warrant advice from qualified professionals who can review the specific facts.
Transition Support
Map the operating rhythm by day, week and month. Identify tasks performed by the owner, employees, contractors, suppliers and software. Ask how exceptions are handled, not only how the standard process works; unusual cases often reveal where undocumented knowledge sits.
Estimate the real replacement workload. An owner may describe a task as only a few hours while relying on years of tacit knowledge, relationships or quick decisions. Document procedures, access, service levels and the cost of replacing work the seller currently performs.
A buyer should know what must remain stable during transition. Critical suppliers, contractors, fulfillment partners and customer-support routines deserve early attention so the first weeks of ownership do not accidentally disrupt revenue.
Liabilities
Transaction documents should describe the commercial deal clearly enough that both sides understand what is being bought, how payment works and what must happen before closing. Definitions matter: ambiguity around assets, liabilities, working capital, transition support or performance conditions can become expensive after the excitement of negotiation has passed.
Distinguish business terms from legal effect. An LOI can record major commercial points while leaving some provisions non-binding, whereas the definitive purchase agreement allocates detailed rights and obligations. Escrow instructions should match the actual transfer sequence and acceptance conditions.
General templates are useful for issue spotting but cannot account for every jurisdiction, tax position or deal structure. Material acquisitions and sales warrant advice from qualified professionals who can review the specific facts.
Professional Review
Transaction documents should describe the commercial deal clearly enough that both sides understand what is being bought, how payment works and what must happen before closing. Definitions matter: ambiguity around assets, liabilities, working capital, transition support or performance conditions can become expensive after the excitement of negotiation has passed.
Distinguish business terms from legal effect. An LOI can record major commercial points while leaving some provisions non-binding, whereas the definitive purchase agreement allocates detailed rights and obligations. Escrow instructions should match the actual transfer sequence and acceptance conditions.
General templates are useful for issue spotting but cannot account for every jurisdiction, tax position or deal structure. Material acquisitions and sales warrant advice from qualified professionals who can review the specific facts.