Due diligence services for a business sale, what each scope covers and what the providers publish for the work

How to scope and price due diligence before the letter of intent

1. Set the scopes the deal actually needs. A small asset purchase may need a financial review and a title search; a share purchase needs legal and tax diligence as well. Each scope is a separate provider and a separate fee, so listing them first stops one firm's proposal from defining the whole budget.
2. Ask for the fee basis in writing. Accountancy firms quote fixed fees for a quality of earnings report at a stated size of business, law firms quote hourly with a cap, and commercial diligence is a project fee. The fee index in this section shows which basis each provider publishes.
3. Price the data room by the deal, not the vendor tier. Virtual data rooms charge per page, per user, per project or per month, and the same deal can cost five times more on one basis than another. Count the documents and the users before choosing a plan, and read the overage terms.
4. Fix the period and the exit. Diligence runs against an exclusivity window in the letter of intent. Providers that miss it cost the deal, not just their fee, so the engagement letter should state the delivery date and what happens if the seller is late with the room.

Common questions

How much do due diligence services cost?

Published fees run from a few thousand dollars for a limited financial review on a small business to six figures for full-scope diligence on a mid-market deal. The index on this section carries each provider's own published figure and the scope it covers.

Who pays for due diligence?

The buyer commissions and pays for diligence on the target; the seller pays for the data room and any vendor diligence it chooses to prepare. Deal terms can shift some of this, but the default sits with whoever is doing the checking.

How long does due diligence take on a business sale?

Providers publish thirty to ninety days for a full scope, driven mostly by how quickly the seller fills the data room. A well-prepared seller with a complete room shortens every provider's timeline at once.

Coverage by selling route

• Small business brokers: who they are and what they charge
• Software business brokers: who they are and what they charge