Before you buy a business, find out what you are actually buying
A seller’s information memorandum shows the business at its best. Due diligence is the work of checking it: whether the profit is real and repeatable, whether the assets listed are the ones you need to keep trading, what liabilities and commitments come with it, and whether the asking price has anything to do with what the business earns. Done properly it either confirms the deal, changes the price, or stops you walking into something you cannot see from the outside.
New Wave runs financial due diligence for buyers of businesses from a single cafe to multi-site groups and practices. You do not need to be an existing client, the review is quoted up front as a project, and we work alongside your lawyer, who covers the contract, title and legal risk while we cover the numbers.
Who does what
| Your accountant (New Wave) | Your lawyer |
|---|---|
| Verify the financials, tax history and BAS against bank data | Review the sale contract and warranties |
| Normalise earnings and test the maintainable profit | Confirm asset ownership, leases and liabilities transfer correctly |
| Identify risks and red flags in the numbers | Check licences, employment and regulatory compliance |
| Form a view on value and the right purchase structure | Protect your position in negotiation and settlement |
If you do not have a commercial lawyer, New Wave Law is in the same building and the two reviews run off one file.
What we look at
Is the profit real
Three years of financials and tax returns reconciled to BAS and bank statements. Owner salaries normalised to market, related-party rent and one-off items removed, and the trend checked: a business that made its best year the year before sale is a question, not a coincidence.
What comes with it
Which assets are in the price, which are leased or owned by a related entity, what condition they are in and what needs replacing. Employee entitlements, supplier contracts, leases and franchisor obligations that transfer to you.
What it depends on
Customer concentration, key staff, the owner’s personal relationships, the lease term and the landlord. These decide whether the earnings survive the change of owner.
What you will need on top
Working capital for the first months, the costs of the handover, and the right purchasing entity for tax and asset protection. Buyers often focus on the price and under-budget everything after it.
The process
- A free 30-minute discovery call with a New Wave team member about the business and your goals.
- A quote agreed up front and a document request list for the seller.
- The financial review, usually complete within four weeks once the documents arrive.
- A written red-flag report: what we found, what it means for price and risk, and what to ask for.
- Support to you and your lawyer through negotiation, and structuring of the purchase if you proceed.
Before you start
Our due diligence checklist sets out what to ask the seller for on day one. If you are the seller rather than the buyer, the business valuations page is the place to start.