The Ultimate SMB Acquisition Diligence Checklist

This Week in ETA:

There are so many due diligence checklists floating around… but we’ve found they’re often either too in-depth for small business acquisitions or too high-level.

My favorite is from Permanent Equity, and it’s available without cost here.

The great thing it, it’s designed with sellers in mind, so that theoretically you could just send it to a seller and ask them to fill it out.

(In practice, it might be better to ask the questions yourself and in waves and fill out the checklist behind the scenes, but it’s written to be seller-friendly, and more sophisticated sellers can probably handle it independently).

We recently started using it for a deal we’re been working on and have been impressed. Definitely worth a look!

Partner Perspective

Andy Harbut, NewCo Risk: Their broker isn’t your broker

We hear it all the time: "We'll just use the seller's insurance agent for quotes." We get it. They know the business. They've been there for years. Why add another vendor?

Here's the thing — the seller's broker has one client. The seller. That relationship was never built around protecting you.

 And it goes deeper than loyalty. Most SMB insurance programs run on autopilot — renewed year after year with minimal review. It can be years since anyone seriously examined the underlying coverage, pricing, or whether the policy actually reflects how the business operates today.

Worse? If that broker missed something along the way, they have every reason to keep it quiet rather than hand you a reason to walk. You wouldn't use the seller's attorney to review the purchase agreement. Same logic applies here.

Independent insurance diligence isn't about finding a better price. It's about having someone in your corner — before you sign — whose only job is to look out for you.

At NewCo Risk, diligence is our deal. We're building a reputation — one deal, one client, one relationship at a time — as the partner who investors and operators trust when the stakes are highest.

Plus:

• Golden insights on post-acquisition life and the reality of running a small business. I completely agree that hiring great people leads to solid processes and enduring systems, which are essential to a successful business.

• Matthias Smith breaks down partner buyouts - what they are, how they are used, and why he thinks they are one of the most underutilized applications of SBA 7(a) financing.

• In case you missed it, we have migrated investor communications to our newly acquired Main Street Capital Network. If you're an accredited investor looking for searcher and independent sponsor deals to invest in, please apply here. If you are a searcher or sponsor looking to raise equity here, please fill out this form about your deal.

Question:

Hit reply and tell us - What’s an area of due diligence you think is under-appreciated?

P.S. - Share Your Buy Box:

If you’re a searcher, let us know your buy box! We see a lot of proprietary deals and love to bring right-fit searchers in on them.