When you buy a small business, the financials get a close look. The lease gets read twice. The customer list gets checked. The software the business actually runs on often gets a single line in the deal documents, if it gets one at all.
That is a mistake, because the systems are where a lot of the value lives and where many post-closing surprises come from: the domain registered to a former employee, the accounting software the buyer cannot subscribe to, the custom database only the seller knows how to use. None of these are hard to check. They just have to be checked before closing rather than after.
This guide is for buyers of small and mid-sized businesses, and for the brokers and CPAs who advise them. We also have a free checklist you can download and take into the deal.
1. Get a Complete Inventory
Ask the seller for a list of every system the business uses, then verify it by walking through a normal week with the people who do the work. Sellers rarely leave things out on purpose. They forget what has become invisible to them. A useful inventory covers:
- Accounting, payroll, and banking connections
- Point of sale, payments, and invoicing
- Scheduling, CRM, quoting, and job management
- Website, domain, email, and phone system
- Any custom software, databases, or heavily customized spreadsheets
- Computers, servers, and where shared files live
- Every paid subscription, with its monthly or annual cost
2. Find Out Who Actually Owns Each Account
This is the single most common problem we see. The domain name, the hosting account, the Google or Microsoft admin login, the social media pages, or the accounting subscription is registered to someone's personal email: the owner's, a family member's, or an employee who left years ago. Whoever controls that email address controls the account.
For each system, find out whose name and email the account is under, who holds the admin login, and whether two-factor authentication goes to a phone that will still be around after closing. Make the transfer of admin control a closing condition, not a promise.
3. Check Whether Licenses and Subscriptions Transfer
Not every license can be handed to a new owner. Some software licenses are tied to the original purchaser, and some subscriptions cannot be restarted once they lapse. A current example is QuickBooks Desktop: Intuit stopped selling new Pro Plus and Premier Plus subscriptions to new US customers in September 2024. A buyer who cannot take over the seller's subscription may need to change accounting platforms immediately. We cover the details in our post on what changed with QuickBooks Desktop 2024.
For anything the business depends on, ask the vendor directly how a change of ownership is handled, and get the answer in writing.
4. Look for Unsupported Software
Software that no longer receives security updates is a cost waiting to land on the new owner. Common examples in small businesses right now:
- Windows 10, which reached end of support on October 14, 2025.
- QuickBooks Desktop 2023 and earlier, discontinued May 31, 2026.
- Microsoft Access 2016 and 2019, out of support since October 2025, and Access LTSC 2021, which ends support in October 2026. See our post on Access end of support.
- Older on-premises servers and anything running on a single aging office PC.
Unsupported software is not automatically a deal-breaker, but replacing it costs money and time, and that belongs in the price.
5. Confirm the Data Can Get Out, and Is Backed Up
Ask how each system's data can be exported, and in what format. Then ask to see a recent backup and, ideally, evidence that someone has restored from it. A backup that has never been tested is a hope, not a backup. If customer history, job records, or financial data can only be read inside one piece of software, you are buying a dependency on that software too.
6. Identify the One Person Who Knows How It Works
Most small businesses have someone who knows why the invoice template is set up that way, which spreadsheet feeds which report, and how to fix the thing that breaks every month. Often it is the seller. Find out who that person is, write down what they know, and make sure the transition period gives you time with them. If it is a contractor, find out whether they will keep working with the business.
7. Clarify Ownership of Custom Software and Source Code
If the business uses anything built specifically for it, such as a custom web application, an Access database, a booking system, or integrations between tools, find out who wrote it and who owns the code. A developer may have kept the rights, or the code may sit in their personal account. Ask for the source code, the hosting credentials, and any documentation, and confirm in the purchase agreement that the code transfers with the business.
8. Secure the Website, Domain, and Email
The domain name carries the business's email, its search rankings, and every link customers have saved. Check who the domain registrar account belongs to, when the domain expires, where email is hosted, and who can change DNS. Losing control of the domain after closing can take down email and the website at the same time.
9. Check the Security Basics
- Is two-factor authentication on for email, banking, and admin accounts?
- Are passwords shared on sticky notes or in a spreadsheet?
- Do former employees still have logins?
- Has the business had a security incident, and how was it handled?
- Does the business carry cyber insurance, and what did the application say?
10. Estimate the Cost to Replace or Modernize
Once you know what exists, put a rough number on what it will take to keep it running for the next few years, and what it would cost to replace anything that is unsupported, untransferable, or understood by only one person. Even an approximate figure gives you something concrete to bring to the negotiation.
Red Flags
- The domain, hosting, or main email account belongs to someone who is not part of the deal.
- The seller cannot produce admin logins for core systems.
- Critical data lives in one file on one computer, with no tested backup.
- A key system runs on software that is already out of support.
- Custom software exists, but nobody can produce the source code.
- The only person who understands a core system is leaving at closing.
- Subscriptions are paid on the seller's personal credit card.
Get the Checklist
We put the points above into a one-page checklist that buyers, brokers, and CPAs can use during due diligence. You can download it free on our business transitions page.
If you're buying, selling, or retiring from a business and want someone to review its systems before closing, we do that for businesses across Los Angeles, the San Gabriel Valley, the Inland Empire, and Orange County. Email info@businesscodingpros.com or call (562) 231-6488.