Buyer-Side Due Diligence

Many People Shouldn’t Buy a Business.If You’re Going To, Go In Knowing.

I will show you what you are actually buying, and whether you are the right person to run it.

I review the whole business before you sign: the books, the contracts, the operations, the people, and the reputation. Then I tell you in plain words what I found, how it connects, what needs a CPA or an attorney, and where you do not need to spend the money at all.

Full due diligence on the business you are buying. $5,000, fixed, agreed before the work starts.

I was under contract on a $1.1M business with my own money committed. Six weeks later I found that its entire workforce was misclassified and the real earnings were negative. I walked away.

Discuss My Due Diligence →

Not ready for a call? Send me the listing. If it’s something I can help with, I’ll tell you where I’d look first.

There Is a Lot of Noise About Buying a Business.

The version you see online is a shortcut. Find a tired owner, get an SBA loan, keep the manager, collect the money. Some of that is true some of the time. What gets left out is the part that decides whether you still own the business in year three.

Many people should not buy a business. If you are going to, go in knowing what you are buying and what the job will ask of you.

I am not here to talk you into a deal. I have no commission riding on whether you close.

I have been the buyer.

Not an advisor watching from the outside. I was under contract on a business, with my own money committed and the SBA application underway. Then I found what was underneath it and walked away. I know what that decision costs, because I made it.

I read people, not only paper.

I am on the seller call with you, live, watching how the questions get answered. And I will tell you honestly whether I think you are ready to run this particular business, and where you would need help. Documents do not tell you either of those things.

I show you how the problems connect.

Not a list of separate flags for you to sort out. One picture of the whole business: how an add-back ties to a staffing problem, how a customer relationship rests on one person, what happens to all of it the day the owner leaves.

A Successful Business Can Still Be a Bad Acquisition.

I seriously considered purchasing a home services company that had operated successfully for approximately 20 years.

During the investigation, I questioned a marketing agency receiving roughly $150,000 a year that could not substantiate the services it was providing. More importantly, I found that the business was treating its entire workforce as independent contractors. When I modeled the economics of converting those workers to employees, the business would have operated at a loss.

I walked away from the acquisition.

This was my own acquisition, not a client engagement. Read the full breakdown of that deal →

Signed an LOI? The Clock Is Running.

Your diligence window is short and the seller’s numbers look good. A CPA will check the financials. An attorney will check the contracts. Each is right about their own area, and neither is looking at what happens when a number depends on a person, or a contract depends on a habit.

I look at all of it. That is where the expensive surprises sit: an add-back that hides a staffing problem, a customer relationship that only holds because the owner shows up, a vendor charge nobody can explain.

You have a broker who works for the seller and a lender who wants the loan. I work for you.

This is built for buyers of founder-led small businesses who want one person looking across the whole company before closing. Tell me your deadline up front and the scope is built around it.

What Gets Investigated

Every investigation is scoped to the complexity of the business, the documentation available, the access you can authorize, and the stage of the acquisition. A review covers areas such as:

On a full due diligence engagement I work through the entire request list, the same request list the Due Diligence Checklist on my resources page is built from. Every document on it that applies to your deal gets requested and read. The lines that do not apply to a business this size get named as not applicable rather than quietly dropped, so you can see what was covered and what was not.

Part of the work is reading what is there. The other part is noticing what is not. A missing advertising line, an owner with no salary, a commitment nobody wrote down.

We agree on the scope before work starts. Anything outside it is named, not skipped.

What it is not.

This is not a certified quality of earnings report, a valuation, deal structure or financing advice, or legal or tax advice. When you need one of those, I will tell you, and I will tell you who to call.

No commission. I am not paid by the broker, the lender, or the seller. You decide what to do with what I find.

Documents are only half of it

I sit in on the meetings.

Seller calls, broker calls, and any other meeting that matters: the founder, the managers, the people who actually run the place. On video where I can see it happen. I need to immerse myself in the business, not read about it secondhand.

What gets said about a business matters. How it gets said, what someone reaches for, what they skip past, and which questions make the room uncomfortable matters just as much, and none of it shows up in a data room.

A Good Business Isn’t Always the Right Business for You.

A business can be exactly what it claims to be and still be the wrong business for you to own. So I look at two things, not one: the financial and operational risk inside the business, and your own experience, resources, expectations and readiness to run that particular business.

Most of the investigation is about the company. Part of it is about the match between the company and you. How many hours a week the business actually needs from its owner, not how many the seller says it needs. Which parts of the job the current owner happens to be good at, and whether those are things you have done before. What you would be walking into on day one, and where you would need to hire to cover what you are not.

Sellers describe their own role optimistically, and most of them are not lying. They absorbed the work so gradually that they stopped counting it. The distance between “about 20 hours a week” and what the calendar actually shows is one of the most common things I find.

If you already own a business and you are buying a competitor, the fit question changes shape. Then it is about operational compatibility and what the integration will actually demand of you: whose systems survive, which habits collide, and how much of your own attention the merge will take while both companies still have to run.

You are not only buying a business. You are buying a job. You should know what the job is before you take it.

This Is Not for Every Buyer.

I work with one or two buyers at a time. That is a real constraint, not a sales line. This work is only worth doing if a deal gets my full attention.

I turn down heavily regulated businesses. The compliance questions there need someone who lives in that industry, and you would be better served by one.

If I don’t think a review will help you, I will tell you that before you pay me anything. And if you have already decided to buy regardless of what I find, don’t hire me. I would be an expensive formality.

I’ve Been on Both Sides of an Acquisition. And I’ve Walked Away From One Myself.

I don’t just know what due diligence looks like on paper. I’ve been involved in acquisitions from different perspectives, and those experiences shape the questions I ask today.

The integration side

Wildfire Pacific

Back in the 1990s, I worked at Wildfire Pacific when we acquired another fire equipment business. We tried to change too much, too quickly, including forcing new computer and part-numbering systems onto experienced employees. It disrupted the operation and taught me a lesson I’ve never forgotten.

Just because you bought a business doesn’t mean you understand how to run it better than the people already there.

The seller’s side

InvestorFuse

At InvestorFuse, I personally managed seller-side due diligence during an acquisition. I organized documentation, coordinated buyer requests, answered questions, and helped navigate the process. I stayed with the company afterward and helped through the transition to new ownership.

I’ve been responsible for producing the information buyers need to evaluate a business. I understand that process from the other side of the table.

The buyer’s side

My own $1.1 million acquisition

I conducted due diligence on a $1.1 million home services business I was considering purchasing. I uncovered financial and operational concerns, including a substantial marketing expense that lacked adequate supporting information and questions about worker classification. The more I investigated, the less comfortable I became. So I walked away.

Sometimes the most valuable outcome of due diligence is knowing when not to buy.

Read the full breakdown of that deal →

Those experiences taught me to look beyond the financial statements. I want to understand how the business really works, what could go wrong when ownership changes, and whether you’re prepared to take it over.

I’ll tell you what I find, even if it’s not what you hoped to hear.

How the Engagement Works

01

Send me the deal

Send the CIM, or the listing if that is all you have, and tell me where you are in the process. I read it before we talk, so the first conversation is about the business rather than about catching me up.

02

Define the scope

We agree on the review areas, the documents, the interviews, the timeline, the deliverables, and a fixed fee before any work begins.

03

Investigate

I work through the request list, sit in on the seller and broker calls and any other meetings that matter, conduct authorized interviews and system walkthroughs, reconcile what doesn’t line up, and follow material warning signs.

04

Present findings

You receive prioritized observations, the evidence behind them, the questions that remain open, and what I recommend doing next.

05

Point you to the right specialists

I identify what you should have verified independently by legal, accounting, tax, licensing, or other specialists, so nothing material is left assumed.

What You Walk Away With

One picture of the whole business, written so you can act on it.

What the investigation found, in plain words

The evidence behind each finding

Risks, prioritized by what matters most

Questions that remain unresolved

What to investigate further, and who should do it

Most of what I find turns out to be ordinary. Telling you which part is not is the job.

Pricing

A fixed fee, set before the work starts. Delivered by the date we agree.

Full Due Diligence

$5,000

The full review before you buy. We agree on what gets investigated, the documents, the interviews and the timeline before any work begins. The fee does not move with the scope.

On a business priced at a million dollars or more, that is a rounding error against the cost of being wrong about it.

You tell me your closing date. If my findings are not in your hands by the date we agree, you do not pay. Your diligence window is the one thing in this process that cannot be extended, so it is the thing I guarantee.

You get the same work whether the business turns out to be clean or not. A review that confirms what the seller told you is not a wasted fee. It is the reason you can sign.

I am paid by you and by nobody else. No referral fees, no broker arrangements, no relationship with your lender.

Rachel Lugo, Founder of Stella and Main

Who’s Doing the Looking

I’m Rachel Lugo. I’ve worked inside founder-led service businesses since 1992, including 14 years at one company where I started as an early employee and ended up running a 35-person organization.

I’ve run customer service, HR, purchasing, and marketing, and I spent 10 years fully in charge of accounting and finance. I know where problems hide when they cross from one part of a business to another.

I have run these companies. I know what normal mess looks like, and I know what does not fit.

I’ve also sat in your seat. My CPA reviewed the numbers and gave me his honest opinion of the business. What he didn’t do was connect those numbers to the worker classification problem, or notice that the gaps in the inventory figures meant the technicians were carrying the parts inventory, and the risk that went with it. My attorney was there for the purchase and sale agreement, and he was expensive enough as it was.

Nobody was looking at the whole business. That is the review I wanted then, and it is the one I do now.

Tell Me About Your Acquisition.

Tell me about the business you are buying, where you are in the process, and your diligence deadline. I will reply within one business day with whether full due diligence is a fit, what I would need from you, and when I could start.

Before you send me anything confidential, I will sign an NDA.

Still evaluating a business before an LOI? Start with The Buyer’s Second Opinion for $750.

Prefer email first? Send me the listing or CIM. If it is something I can help with, I will tell you where I would look first.

Work is delivered remotely through records, authorized interviews, and system walkthroughs. An investigation reduces what you’re guessing about. It does not guarantee every hidden liability is found or that a purchase is safe. Legal opinions, tax advice, financial statement audits, formal quality-of-earnings opinions, licensing determinations, and property or environmental inspections are outside the service. Where physical verification is needed, you’ll need an independent local specialist.