How long does typical financial due diligence take?

October 17, 2023
by an investor from Columbia University - Columbia Business School in Seattle, WA, USA
For those of you who've completed a relatively small transaction ($500K SDE, <$2M purchase price)), how long did your financial due diligence that consists of simple QoE and proof of cash take? Obviously depends on the business but wanted to get a ballpark number, assuming I get the necessary data from the seller reasonably quickly. I think the accounting of the business itself should be pretty straight forward, but one only thing I'm concerned about and want to verify throughly is the seller's personal expenses added back to SDE (there are quite a few items being added back).
Trying to sequence the different parts of due diligence to optimize cost, so wanted to get a rough timeline set to share with the seller and the broker. I figured I could engage the lawyers to draft up Purchase Agreement once I'm comfortable with the financial DD. For example, is 45 days enough as a budget for financial DD?
Thanks!
from Harvard University in New York, NY, USA
We are a full service global accounting firm with presence in 7 countries and assist lower and middle market transactions extensively. Our India presence, allows us to be cost efficient and at the same time maintain the quality of our deliverables. We currently have the bandwidth to start the project next week. Happy to connect with you.
Email me at redacted for more details and to get a sample copy of our redacted report.
from Georgia Southern University in Atlanta, GA, USA