Due Diligence Timeline: From LOI to Closing

You've closed the deal. The business is yours. Now what?

The first 90 days are CRITICAL. This is when you'll discover issues you missed in due diligence, win over skeptical employees, and either solidify customer relationships or watch them leave.

Here's your complete week-by-week transition plan based on what successful buyers actually do.

## Before Day 1: Pre-Closing Preparation

### Week -2 to -1: Setup Phase

**Legal/Administrative:**
- [ ] Business bank accounts opened and funded
- [ ] Business credit cards ordered
- [ ] Accounting software access obtained
- [ ] Email address created
- [ ] Phone system access arranged

**Transition Planning:**
- [ ] Transition schedule agreed with seller
- [ ] Key contact list received
- [ ] Critical passwords/access documented
- [ ] First week schedule planned
- [ ] Announcement draft prepared

**Learning:**
- [ ] Review all due diligence materials again
- [ ] Study operational procedures
- [ ] Review customer/vendor lists
- [ ] Understand cash flow cycle
- [ ] Identify immediate risks

## Week 1: Learn and Listen

**Primary Goal:** Understand how the business actually runs (not how you think it runs).

### Day 1-2: Shadow the Seller

**Don't:** Make changes, announce plans, criticize how things are done
**Do:** Watch, listen, take notes, ask questions

**What to Observe:**
- How decisions get made
- What takes up most time
- Where problems arise
- Who does what
- Communication patterns
- Daily/weekly rhythm

**Questions to Ask:**
```
- Walk me through a typical day
- What should I do first each morning?
- What are the critical daily/weekly tasks?
- What's the most common customer issue?
- What problems come up regularly?
- Who should I talk to if X happens?
- What would you do differently if starting over?
```

### Day 3-5: Meet Everyone

**Employees (One-on-One):**

"Hi, I'm [Name], the new owner. I'm here to learn from you. Tell me:
- What do you do here?
- How long have you been here?
- What works well?
- What could be better?
- What concerns do you have?
- How can I support you?"

**Key Points:**
- Listen more than talk
- Don't make promises
- Take notes
- Thank them for their honesty
- Don't criticize previous owner

**Top 10 Customers (Call or Visit):**

"Hello, I'm [Name], the new owner. I wanted to introduce myself and let you know:
- Nothing will change in how we serve you
- Your contact person remains the same
- I'm here to ensure we continue excellent service
- Any questions or concerns?"

**Ask them:**
- How long have you been a customer?
- What do you value most about us?
- Any areas where we could improve?
- Any concerns about the ownership change?

**Key Vendors/Suppliers:**

"Hi, I'm [Name], the new owner. Quick call to introduce myself and confirm:
- Our relationship continues
- Payment terms unchanged
- Your contact remains [Name]
- Any paperwork needed for the transition?"

## Week 2: Understand the Money

**Primary Goal:** Master the financial operations and cash flow.

### Financial Deep Dive

**Day 6-7: Cash Flow**
- [ ] Understand complete cash cycle
- [ ] Review current cash position
- [ ] Identify upcoming major expenses
- [ ] Verify all bills are current
- [ ] Check upcoming receivables
- [ ] Create 90-day cash flow projection

**Day 8-9: Accounting System**
- [ ] Sit with bookkeeper/accountant
- [ ] Review chart of accounts
- [ ] Understand categorization
- [ ] Learn reporting system
- [ ] Review monthly close process
- [ ] Set up your own dashboards

**Day 10-12: Financial Controls**
```
Review:
- Who can spend money?
- Approval processes
- Vendor payment system
- Customer payment methods
- Credit card security
- Bank reconciliation process
- Fraud prevention measures
```

**Critical Actions:**
- [ ] Change all banking passwords/access
- [ ] Add yourself to all financial accounts
- [ ] Review and update signatory authority
- [ ] Verify insurance is transferred
- [ ] Check all automatic payments

## Week 3: Operational Mastery

**Primary Goal:** Learn to run daily operations yourself.

### Learn Every Role

**Spend Time:**
- Production/service delivery (2-3 days)
- Customer service (1 day)
- Sales process (1 day)
- Back office operations (1 day)

**For Each Area, Document:**
```
- Step-by-step procedures
- Common issues and solutions
- Who to call for problems
- Key contacts and vendors
- Standard metrics/KPIs
```

### Create Your Ops Manual

If there isn't one (there usually isn't), start creating it:

**Document:**
- Opening/closing procedures
- Daily task checklists
- Weekly routines
- Monthly processes
- Emergency contacts
- Vendor information
- Equipment manuals
- Common problem solutions

## Week 4-6: Stabilize

**Primary Goal:** Ensure business continues smoothly while you learn.

### Management Transition

**From Seller to You:**

Week 4:
- You shadow seller
- You ask questions constantly
- Seller handles issues

Week 5:
- Seller shadows you
- You handle issues with guidance
- Seller provides feedback

Week 6:
- You operate independently
- Seller available for questions
- Reduce seller time to 10 hours/week

### Establish Your Routine

**Daily:**
- Review prior day sales/metrics
- Check cash position
- Respond to urgent emails
- Walk the floor/talk to employees
- Handle critical issues

**Weekly:**
- Review financials
- Team meeting
- Top customer check-ins
- Vendor relationships
- Plan next week

**Monthly:**
- Full financial review
- Strategic planning time
- Major improvements/changes
- Performance reviews

### Quick Wins

Identify and implement 2-3 easy improvements:

**Good Quick Wins:**
- Clean/organize workspace
- Fix broken equipment
- Improve communication
- Better scheduling
- Customer appreciation

**Bad Quick Wins (Avoid):**
- Firing people
- Major process changes
- New technology
- Rebranding
- Significant policy changes

## Week 7-9: Optimize

**Primary Goal:** Make your first improvements based on what you've learned.

### Identify Opportunities

**Review Your Notes:**
- What problems keep recurring?
- What wastes time?
- What frustrates employees?
- What do customers complain about?
- Where is money being wasted?

**Prioritize by:**
1. Impact (how much improvement?)
2. Ease (how hard to implement?)
3. Risk (what if it fails?)

**Target:** High impact + Easy to implement + Low risk

### Implement Improvements

**Process:**
1. Identify specific problem
2. Gather input from affected people
3. Propose solution
4. Test on small scale
5. Gather feedback
6. Roll out broadly
7. Monitor results

**Example Changes:**
- Better scheduling system
- Improved customer communication
- Streamlined ordering process
- Enhanced employee training
- Updated pricing structure

## Week 10-12: Plan for Growth

**Primary Goal:** Develop your 6-12 month strategy.

### Performance Review

**Compare Actual vs. Pro Forma:**
```
Category | Pro Forma | Actual | Variance
Revenue | $85k | $78k | -8%
Expenses | $62k | $67k | +8%
Key Customers | 45 | 42 | -3
Employee Issues | 0 | 2 |
```

**Analyze:**
- What's better than expected?
- What's worse?
- What surprised you?
- What did due diligence miss?

### Create Your 90-Day Plan

**Must Address:**
- Immediate threats/risks
- Customer retention strategy
- Employee development
- Operational improvements
- Revenue enhancement
- Cost optimization
- Your work/life balance

### Set Metrics

**Choose 5-7 Key Metrics to Track:**

**Financial:**
- Weekly revenue
- Monthly gross margin
- Operating cash flow

**Operational:**
- Customer count
- Average transaction value
- Customer complaints

**People:**
- Employee turnover
- Productivity metrics

## Critical Mistakes to Avoid

### ❌ Mistake #1: Changing Too Much Too Fast

**The Trap:** "I'm going to fix everything wrong with this business!"

**Why It Fails:**
- You don't understand why things are done that way
- Employees resist and quit
- Customers get confused
- You break things that weren't broken

**Do Instead:**
- Wait 90 days for major changes
- Make only critical/urgent fixes
- Gather input before acting
- Test changes small before rolling out

### ❌ Mistake #2: Not Managing Cash Flow

**The Trap:** "The business has good revenue, we're fine."

**Why It Fails:**
- Revenue ≠ cash
- You have unexpected expenses
- Customers pay slower than expected
- You run out of cash despite profitability

**Do Instead:**
- Weekly cash flow review
- 13-week cash flow projection
- Maintain 2-3 months cash reserve
- Accelerate collections

### ❌ Mistake #3: Neglecting Key Relationships

**The Trap:** "I'm too busy learning operations to meet customers."

**Why It Fails:**
- Customers feel ignored
- They wonder if service will decline
- Competitors poach them
- You lose revenue

**Do Instead:**
- Top 20 customers: meet first 30 days
- Monthly customer check-ins
- Quick response to issues
- Maintain relationships

### ❌ Mistake #4: Trying to Do Everything Yourself

**The Trap:** "I'll just work 80 hours a week until I have it figured out."

**Why It Fails:**
- You burn out
- You become the bottleneck
- You miss strategic issues
- Your health/family suffers

**Do Instead:**
- Delegate what others can do
- Focus on high-value activities
- Build systems, not dependencies
- Maintain work/life balance

### ❌ Mistake #5: Ignoring Employee Concerns

**The Trap:** "They just need to adjust to new ownership."

**Why It Fails:**
- Best employees leave
- Morale craters
- Productivity drops
- You lose institutional knowledge

**Do Instead:**
- Regular check-ins
- Address concerns quickly
- Communicate changes
- Show appreciation
- Invest in training

## Your 90-Day Checklist

### By Day 30:
- [ ] Met all employees one-on-one
- [ ] Contacted top 20 customers
- [ ] Mastered financial system
- [ ] Can run daily operations
- [ ] Identified immediate issues
- [ ] Made no major changes yet

### By Day 60:
- [ ] Operating independently
- [ ] Implemented 2-3 quick wins
- [ ] Financial performance on track
- [ ] Customer retention stable
- [ ] Employee concerns addressed
- [ ] Documented key procedures

### By Day 90:
- [ ] Completed comprehensive business review
- [ ] Developed 6-12 month strategy
- [ ] Established KPI tracking system
- [ ] Built strong team relationships
- [ ] Made first strategic improvements
- [ ] Feeling confident and in control

## When Things Go Wrong

### If You Discover Major Problems:

1. **Don't Panic**
- Most issues are fixable
- You can't unring the bell
- Focus on solutions

2. **Assess the Damage**
- How serious is it?
- What's the financial impact?
- Is it seller's fault or yours?
- Can it be fixed?

3. **Take Action**
- Address immediately
- Communicate with affected parties
- Bring in experts if needed
- Document everything

4. **Legal Options**
- Review purchase agreement
- Check representations & warranties
- Consult with attorney
- Seller indemnification?

## Tools to Help You Succeed

**Download:**
1. **Transition Plan Template** - Week-by-week checklist
2. **Key Contacts Spreadsheet** - Track all important relationships
3. **First 90 Days Metrics Dashboard** - Monitor critical KPIs
4. **One-on-One Meeting Template** - Employee and customer conversations
5. **Quick Wins Worksheet** - Identify and prioritize improvements

## The Bottom Line

The first 90 days set the tone for your entire ownership. Take them seriously:

**Week 1-3:** Learn and listen
**Week 4-6:** Stabilize and master
**Week 7-9:** Optimize and improve
**Week 10-12:** Plan and grow

Go slow to go fast. Understand before changing. Build relationships before pushing performance.

Congratulations on your new business. Now go make it even better.