Why Due Diligence Can Make or Break a Business Sale

What should you really check before buying a business?

In this episode of Happy Buyer, Happy Seller, Shaun Thornton sits down with CPA and entrepreneur Adrienne Brace to break down the critical role of due diligence in buying and selling a business.

They discuss how buyers can verify financial data, what red flags to look for, and why relying on profit and loss statements alone can lead to costly mistakes. Adrienne explains how professional due diligence works, including how to cross-check financials using bank statements, tax returns, and multiple data sources.

The conversation also covers tax implications when selling a business, including capital gains, C-corporations, and how seller financing (promissory notes and earn-outs) can impact when taxes are paid.

If you're buying, selling, or planning your exit, this episode provides practical insights that can help you avoid major financial mistakes and make smarter decisions.

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📌Connect or follow Shaun Thornton

👉 LinkedIn: https://www.linkedin.com/in/shaunthorntonbusinessbroker/

👉 Facebook: https://www.facebook.com/ShaunThorntonBusinessBroker/ 👉 YouTube: https://www.youtube.com/@HappyBuyerHappySellerPodcast 00:00 Introdu

ction to the Podcast

01:20 Meet Adrienne Brace

03:00 What Infinity CPA Does

05:20 Why Accounting Is the Language of Business

07:30 What Is Due Diligence?

10:00 What Documents Are Required

13:00 How Due Diligence Actually Works

16:30 Red Flags and Warning Signs

20:00 Verifying Revenue and Bank Deposits

23:00 Tax Returns vs Profit & Loss

25:30 Why Buyers Should Use a CPA

27:30 Tax Implications of Selling a Business

30:00 Seller Financing & Tax Deferral

32:30 Preparing a Business for Sale

33:40 Final Advice for Buyers and Sellers

👍 If you found this episode helpful, subscribe and share it with a business owner, buyer, or entrepreneur who could benefit from understanding due diligence and the financial side of buying or selling a business.

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