Why This Checklist Matters
According to the Exit Planning Institute, businesses that enter the market with complete documentation sell for 20-50% more and close 40% faster than those that scramble to assemble records during due diligence. Every missing document gives the buyer leverage to negotiate down or walk away.
This checklist is organized into three categories -- Financial, Operational, and Strategic -- in the order of priority. Start with Financial documents as they are the foundation of any valuation.
Financial Documents
3 Years of Federal Tax Returns
Complete returns including all schedules. These are the baseline that every buyer and lender will verify against your P&L.
3 Years of Profit & Loss Statements
Monthly or quarterly P&L statements. If they don't reconcile to tax returns within 5%, you need to fix that first.
Current Balance Sheet
Assets, liabilities, and owner's equity as of the most recent month-end. Include any related-party notes or loans.
Owner Add-Back Documentation
A detailed schedule of every personal expense running through the business, with supporting evidence. This is where value is found or lost.
Accounts Receivable Aging Report
Current AR aging showing 30/60/90/120+ day buckets. High AR aging signals collection risk that buyers will discount.
Operational Documents
Customer Revenue Breakdown
Revenue by customer for the past 12 months. This reveals customer concentration -- the #1 deal risk factor. Any customer above 15% of revenue needs attention.
Employee Roster & Compensation
All employees, roles, tenure, compensation, and benefits. Highlight key employees whose departure would significantly impact the business.
Lease Agreements
Current lease terms, expiration dates, renewal options, and assignment clauses. Lease transfer is the #1 closing delay in asset sales.
Key Contracts & Agreements
Customer contracts, supplier agreements, vendor terms, franchise agreements. Length remaining and assignability are critical.
Equipment & Asset List
All fixed assets with estimated values, maintenance history, and remaining useful life. Include vehicles, technology, and specialized equipment.
Strategic Documents
Standard Operating Procedures (SOPs)
Even basic documentation of key processes. Businesses with documented SOPs are valued 15-25% higher because they demonstrate the business can operate without the owner.
Insurance Policies
Current policies covering liability, property, workers comp, key person, and any specialty coverage. Gaps in coverage are due diligence red flags.
Intellectual Property Inventory
Trademarks, patents, trade secrets, proprietary processes, software licenses, domain names. Document ownership and registration status.
Organizational Chart
Current org chart showing reporting structure, key decision-makers, and management depth below the owner. This is a visual representation of owner dependency risk.
Growth Opportunity Summary
A brief document outlining realistic growth opportunities the business has not yet pursued. Buyers pay for upside potential -- give them a roadmap.
Ready to Put Your Checklist to Work?
Start with a free valuation estimate using our instant calculator, or schedule a consultation to walk through your specific situation with an advisor.
Valuation Checklist FAQ
How long does it take to gather these documents?+
For a well-organized business, 1-2 weeks. For businesses with less organized records, 4-8 weeks. The most time-consuming items are typically: reconstructing add-back documentation, assembling 3 years of clean tax returns, and pulling together customer concentration data. Start with the financial documents (items 1-5) as they are the most critical and often take the longest.
Do I need all 15 items for an informal valuation?+
No. For a quick preliminary estimate using our free valuation tool, you only need your annual revenue, SDE or EBITDA, and industry. For a formal valuation from a Certified Valuation Analyst, you will eventually need most of these items. We recommend starting the process even if you do not have everything ready -- the initial conversation helps prioritize what matters most for your specific business.
What is an owner add-back and why does it matter?+
Owner add-backs are personal expenses that run through the business: your salary above a market-rate replacement, personal vehicle, health insurance, retirement contributions, family members on payroll who would not be retained, one-time expenses, and other discretionary spending. Properly identifying and documenting add-backs is the single biggest factor in maximizing your valuation. The average small business has $75K-$200K in add-backs that increase the SDE.
Can I get a valuation without sharing all of this with a buyer?+
Yes. The valuation process is between you and your advisor -- not the buyer. You use these documents to establish your value range and prepare for the market. Buyers only see the Confidential Information Memorandum (CIM), which presents the information in a curated, professional format after signing an NDA. Your raw documents are only shared during due diligence after an LOI is signed.
Ready to Take the Next Step?
Find out how ready you are or talk to an advisor about your options.