Due Diligence Deliverables Example

Due Diligence Phase 1- Review all information voluntarily provided by seller. This typically includes but is not limited to:

  • 3-5 years of financials
  • List of inventory included in the sale
  • List of trucks, tools, and other assets included in the sale
  • List of current & ongoing contracts
  • Employee roster, job duties, length of employment, compensation, qualifications, etc.
  • Some sort of proof of current and past client lists & revenue per client

Phase 1 Deliverables-


1. Evaluate and provide written and oral findings relating around if the voluntarily provided information supports claims made by the business, its principals and brokers and our clients assumptions about the target company in the following areas:    

  • Gross revenue
  • Number of employees required to generate said revenue
  • Mix of revenue (Residential, Commercial, New Construction, Remodel, Service & Repair, Replacement)
  • Departmentalized labor splits
  • Growth potential

2. Evaluate and provide written and oral findings relating to the following first look at the target company:

  • Client facing image (social media, website, reputation) as it compares to the market place
  • Current marketing and branding program as it compares to the market place
  • Current employee roster

3. Provide written and oral findings of how the target company’s profit and loss reports match up to our model. Identify all specific areas where key differences are present and offer opinions on why they are different.   


4. Provide written and oral opinions on if we feel the selling price of this business is supported by the financials.  


5. Evaluate current assets (trucks, tools and inventory) and provide written and oral feedback on if the current trucks, tools and inventory support Clients vision for the company. If not, provide an estimate of what is required and approximate budget to acquire. 


6. Provide in depth written and oral findings of any areas deemed as an area of concern during Phase 1. 


Due Diligence Phase 2- In-depth look into the operations of the target company to identify opportunities and risks.


Phase 2 Deliverables-


1. In depth evaluation of the following areas of the target business to discover opportunity for improvement and potential risks post acquisition:

  • General day-to-day operations
  • Current sales cycle
  • Current marketing strategy
  • Current organizational chart for employees and roles
  • Current vendor associations
  • Current pricing methodology
  • Current service offerings
  • Current employee compensation
  • Current employee benefits offered
  • Current method behind the accounting practices in this business
  • Diversification of client base
  • Historical sales cycle
  • Current employee retention highlights
  • Current unique selling propositions (what makes them better than the competition)
  • Current inventory and re-ordering process
  • Current competition
  • Current metric tracking & how is it tracked
  • Current actual involvement of the owner or owners
  • Calculate or hypothesize average performance of field staff
  • Current and ongoing contracts

Due Diligence Phase 3- Provide opinions, recommendations and applicable actions to address discovered findings in Phase 2.


Phase 3 Deliverables-


Provide written and oral summary of major ways to impact the following in the target business:

  • Areas to grow profitability and how to do it
  • Areas to grow revenue and how to do it
  • Areas to increase operational efficiencies and how to do it
  • Areas to grow market share and how to do it
  • Future financial projections
  • Future manpower projections
  • Impact on employees
  • Impact on clients
  • Operational impact
  • Existing contractual obligation (if any exist)
  • Licensing issues short and long term
  • Manpower and staffing concerns and how to deal with them