Due diligence is the structured process of investigating a business after the LOI is signed and before closing. Its purpose is to verify that the seller's representations are accurate, surface hidden risks, and provide information needed to finalize financing and purchase agreement terms. In Canadian SMB acquisitions, due diligence typically spans 30 to 60 days and covers three main workstreams: financial due diligence (quality of earnings, working capital, tax exposure), legal due diligence (contracts, leases, employment, IP, regulatory), and operational due diligence (site visits, customer references, supplier contracts, key-person assessment). Buyers engage a CPA for financial diligence and an M&A lawyer for legal diligence, with an acquisition consultant coordinating both streams and managing the data room. Due diligence findings are not just go/no-go inputs — they are negotiation tools. Material issues uncovered during diligence justify price adjustments, holdbacks, seller indemnities, or, in serious cases, walking away. Buyers who skip or rush due diligence to appear less demanding are taking on undisclosed risk that can cost far more than diligence fees.
During due diligence on a Richmond auto repair shop, the buyer's accountant discovers that $80,000 of the reported SDE came from a one-time government COVID subsidy that the seller had not disclosed as non-recurring. The buyer uses the finding to renegotiate the price down by $200,000 — well worth the $15,000 in combined accountant and legal fees.
Ali coordinates all diligence workstreams so findings are integrated — a risk surfaced in financial diligence immediately feeds into negotiation leverage, not just a report that sits on a shelf.