Buying an Existing Business: A Seven-Point Checklist

A buying-an-existing-business checklist should help you verify what you are buying and how it will operate after closing. Financial records matter, but so do the people, access, agreements, and cash the business depends on.

Use these seven checks to organize the review with your advisers. For each one, record the evidence received, the unresolved questions, and the person responsible for the next action. An unanswered question is still open—not a box to tick because the seller sounds confident.

1. Reconcile the financial story

Ask your accountant to compare the financial statements with supporting sales, bank, tax, and expense records. Identify unusual items and the evidence behind any proposed earnings adjustments.

• Does the period being presented include seasonal highs and lows?

• Which costs would continue, change, or be added under your ownership?

• Do the records explain the difference between reported profit and cash available?

Our Amazon business P&L review guide explains the questions behind the headline numbers.

2. Identify revenue dependencies

Break down performance by product, customer, supplier, and sales channel where the records allow. Look for concentrations that would make one disruption difficult to absorb.

Ask what happens if a major customer leaves, a leading product stops selling, or a marketplace account is restricted. Adding products or channels may be an option to test; it is not an automatic solution or a guaranteed return on spending.

3. Understand the operating work

Map the tasks required to keep the business running: purchasing, inventory planning, fulfillment, marketing, customer service, finance, and account administration.

• Who performs each task, and how much involvement does the owner provide?

• Which procedures are documented and demonstrated?

• Who covers urgent issues or absences?

Ask for examples from normal operations and from recent problems. A procedure document alone does not show that another person can use it successfully.

4. Confirm the people and transition plan

Identify the employees, contractors, and relationships that are important to continuity. Establish what participation is agreed, what remains uncertain, and what a replacement would involve.

Define the seller's proposed handover responsibilities, training, access, availability, and completion milestones. Have advisers review how those commitments will be documented. Do not treat a friendly assurance, seller financing, or an operating partnership as a substitute for clear responsibilities.

5. Map the cash needed after closing

Build a cash forecast around the timing of supplier payments, inventory purchases, customer receipts, recurring expenses, and any financing payments. Ask whether the current owner has injected funds, deferred payments, or relied on arrangements that will change.

Model scenarios relevant to the business, such as slower sales, longer replenishment, or higher costs. The forecast should make assumptions visible and help you evaluate the capital commitment with your financial advisers. There is no universal number of inventory days or cash buffer that fits every acquisition.

6. Verify what can actually transfer

List the assets, intellectual property, inventory, agreements, licenses, accounts, and records included in the proposed transaction. Identify ownership evidence, restrictions, consents, and arrangements that must be replaced or established separately.

For an Amazon business, confirm the applicable marketplace requirements directly rather than assuming every account or permission moves with the brand. Have qualified legal and tax advisers review the transaction structure and relevant obligations.

7. Resolve the open items before committing

Separate verified facts, proposed terms, and projections in your decision record. Assign a resolution, responsible person, and deadline to each material issue. If something cannot be resolved, make the remaining uncertainty explicit and decide with your advisers whether to proceed, renegotiate, or stop.

The SBA's business-planning guidance emphasizes due diligence and considering an attorney and accountant when buying an existing business. This checklist is a starting point for that work, not legal, tax, or investment advice and not a guarantee against loss.

Exploring an acquisition with Angora? Review the Acquisition process, then start an Acquisition application to discuss your goals and circumstances. Applying does not commit you to a purchase.