What Is Proper Due Diligence?
Due diligence means digging deep — beyond what the seller tells you — to verify the financial health of the business you’re about to buy. We look at profit and loss statements, balance sheets, tax compliance, assets, liabilities, and more to confirm whether the business is everything it claims to be.
Who Does What: Accountant vs. Lawyer?
When buying a business, you need both legal and financial insight. We partner with an experienced commercial lawyer to give you a full picture.
| Your Accountant (New Wave) | Your Lawyer |
|---|---|
| Analyse financials & tax history | Review sale contracts |
| Identify risk areas & red flags | Check asset ownership & liabilities |
| Support realistic valuation | Ensure legal compliance |
| Provide insights into profitability & sustainability | Protect your legal interests |
Our Due Diligence Process
We’ve streamlined the process to give you peace of mind and negotiating power:
Discovery Call
Document Collection
Financial Health Check
Valuation Support
Operational Review (Optional)
Red Flag Report
Negotiation Support
Why Choose New Wave for Due Diligence?
- You don’t need to be a current client — we offer this service as a standalone.
- We’ve done due diligence across a wide range of industries.
- Our team knows the traps buyers fall into — and how to avoid them.
- We’re straight shooters — if something’s not right, we’ll tell you.
“Done correctly, due diligence is the difference between buying a ticking time bomb and discovering a gold mine.” – Reuben Bergola
Recent Due Diligence Story
Case: Franchise Restaurant Business (Confidential)
We recently undertook due diligence for a client interested in purchasing a well-known franchise in the restaurant sector.
Original Asking Price: ~$600,000
Key Findings:
EBITDA was significantly lower than the client had forecasted
Overheads required by the franchisor made maintainable profits unfeasible
Owner’s allowable salary was not enough to support a comfortable living
Previous owner had been operating at a loss with very low margins
Outcome:
Final assessed value was approximately $30,000
The client is still in negotiation but has avoided what would have been a high-risk investment
Frequently asked questions
That depends on how quickly the vendor and client can supply documentation. In most cases, if both parties are prepared and responsive, we can complete the process in approximately 2 weeks.
We assess:
Future Maintainable Earnings
Return on Investment and Equity
Financial anomalies or large variances compared to benchmarks
Assets included in the purchase vs what’s required to continue operating
Liabilities or debt that may transfer with the business
Key risks that may not be obvious from surface-level figures
We absolutely support small business purchases. Whether you’re buying a $50k café or a multi-million dollar operation, we tailor our due diligence approach to suit.
Many clients focus solely on the asking price and past performance, but:
Working capital reserves,
Upfront operational costs, and
The right purchase structure for taxation and asset protection
are all equally important to a successful acquisition.
Free Resource: Due Diligence Checklist
Want to know what to look for before buying a business?
Business Purchase Due Diligence Checklist: What to Review Before You Buy
Buy with confidence. Avoid costly mistakes.
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