Due diligence

Due diligence is the period after an offer is accepted in which the buyer checks that the business is what the seller says it is, before the money and the assets move.

What diligence looks like at $50k–$150k

Two to four weeks, not two to four months. The buyer at this level is an operator with capital, and the checks are proportionate rather than corporate. Revenue is reconciled line by line against the payment processor and the bank, costs are confirmed from actual invoices, churn and concentration are measured from the customer table, and traffic is traced to its sources in analytics rather than taken from a summary. The code gets read, dependencies get listed, and every account the product runs on gets traced back to a named owner.

Where it bites

Most price movement at this size comes from a short list: revenue that does not reconcile, revenue leaning on one customer, a single acquisition channel nobody has tested an alternative to, and work that only the founder knows how to do. None of it is usually deliberate. These are the things a seller stops noticing after four years of running the business.

A worked example

A listing at $120,000 claims $3,300 MRR and $40,000 of trailing annual profit. The buyer pulls 14 months of processor payouts and matches them to bank deposits. Two line items turn out to be annual plans from accounts that have since cancelled, and a $95 monthly tool was being paid from a personal card and never appeared in costs. Trailing profit lands at $34,500, and at a 3× market-convention multiple for micro-SaaS the conversation moves to roughly $103,000.

Why it matters

Diligence is where the price either holds or it does not. Sellers who prepare for it, with clean statements and documentation written before anyone asks, defend their number. Sellers who improvise usually pay for it in the final figure.

Related: trailing-twelve-months, customer-concentration, letter-of-intent