You found a business you want to buy. The numbers look good. The seller seems motivated. And you're already picturing yourself running the place. I get it — that excitement is real. But before you sign anything, there's a process that separates smart buyers from sorry ones: due diligence. And most buyers don't do nearly enough of it.

Due diligence is your legal and financial investigation of everything the seller is telling you. It's how you verify that the revenue is real, the contracts are transferable, the licenses are valid, and there aren't lawsuits or tax liens hiding in the background. It's not a formality. It's the most important thing you'll do in the whole transaction.

Here's what I see buyers miss most often. First, they look at the financials but don't dig into the customer concentration. If 40% of the business's revenue comes from one client, and that client has no obligation to stay after the sale, you're buying a very fragile business. Second, they assume the lease transfers automatically. It almost never does. The landlord typically has to consent, and some leases give landlords the right to increase rent or change terms as a condition of that consent. Third, they don't review employment matters — unpaid wages, misclassified contractors, non-compete agreements that could walk out the door with the seller's key employees.

I've also seen buyers skip reviewing the seller's existing contracts entirely, only to find out post-closing that several key vendor agreements had change-of-control clauses that allowed the other party to terminate the moment the ownership changed. The revenue they thought they were buying evaporated in the first 90 days.

The seller's job is to put the best face on their business. Your job — and your attorney's job — is to find out what's behind it.

If you're seriously considering buying a business, don't wait until you're under contract to get legal counsel involved. The earlier we're in, the more leverage you have and the more money we can save you. Schedule a consultation with BLG before you make your next move.