Site visit due diligence: what a spreadsheet cannot tell you about a business

Site visit due diligence is the part of buying a business that a data room cannot replace: walking the premises, watching a normal day happen, and checking that what the accounts and the seller's story describe is what is actually there. Three years of filed accounts tell you what happened. A morning on site tells you how. A buyer who skips this step is relying entirely on documents the seller chose to prepare and a conversation the seller controls.

What a walk-through finds that documents do not

A set of accounts can show healthy output without showing that two of the six machines that produce it have not run in months. A customer list can show steady orders without showing that the quality-control bench is a table someone cleared off that morning. Paper is accurate about the past. It says nothing about condition, pace, or atmosphere, and those three things often decide whether the business you buy still runs the way it did the week before you arrived.

A visit is also the fastest way to find out who actually does the work. Ask the same question of two different people, on the floor rather than in the owner's office, and the gaps between their answers tell you more than an afternoon of spreadsheets. Our due diligence checklist for a first acquisition covers this under "see it working"; this article goes further into what to look for once you are there.

Build a short, specific list before you go

A seller who is any good at selling will design a tour. Bring your own list and work through it regardless of the route they take you on.

• Premises and equipment. Which assets are owned outright, which are leased or financed, and what state they are in. Ask for maintenance logs, not just a look at the machine.
• Stock. Count a sample of what is on the shelf and compare it with what the balance sheet claims is there. Mismatches point to obsolete stock being carried at full value.
• People. Who is named, unprompted, as the person who actually plans the work. If it is not the owner, that person's departure is a risk worth pricing in. Our piece on twenty questions to ask a seller before you buy their business has more on testing this before you sign anything.
• Safety and compliance records. Ask to see the accident book and any history of reports under RIDDOR, the UK regulations requiring employers and those in charge of premises to report and keep records of workplace deaths, injuries and dangerous occurrences, as the Health and Safety Executive explains in its RIDDOR guidance. A thin record paired with staff who mention recent near misses is worth a direct question before completion, not after.
• Customers and footfall. Watch an enquiry become a job, or a customer walk in and walk out, and see whether it matches the volume the accounts describe.

If you are buying the company itself, rather than only its assets, bear in mind that UK employees you meet on the visit are likely to transfer to you automatically, with their existing terms and continuity of service intact, under the Transfer of Undertakings (Protection of Employment) regulations. GOV.UK's overview of business transfers and TUPE confirms this applies regardless of the size of the business, with exceptions such as redundancy or insolvency. That is useful context before you start asking staff about their roles and plans.

Check who else has a claim on what you are seeing

A walk-through confirms a machine is standing on the factory floor. It does not tell you whether a lender already has a claim on it.

In the UK, Companies House holds a public register of charges for every registered company: filings that show whether a lender holds security over land, equipment, stock or receivables, and whether that charge is still active or has been satisfied. GOV.UK's guidance on registering a charge for a limited company sets out how these filings work. A heavily charged balance sheet is not necessarily a problem, but it is a reason to ask your solicitor to check the register before you rely on anything you saw on the floor as unencumbered.

In the US, the equivalent public record is the UCC-1 financing statement, a filing that gives public notice of a security interest in a company's equipment, inventory or receivables. As Cornell Law School's Legal Information Institute explains in its entry on the UCC financing statement, these are filed with the state, not held in one national register, so the search has to go to the right state before you can call it clear. Either way, this check runs alongside the visit, not instead of it: the visit tells you the asset exists and works, the register tells you who else might have a claim on it.

When you cannot be there yourself

Not every acquisition is down the road. A buyer looking at a business in another city, or another country, faces a real trade-off: fly out for a visit that might end in a price renegotiation or a walk-away, or skip it and rely on photos and a video call.

This is exactly the situation a scoped, single-purpose visit is built for. Rather than the buyer travelling, a representative already in the area, an experienced operator, or someone taken on for this specific trip, can carry out the same walk-through, working from the same checklist, and report back. Our pieces on the factory visit before ordering and on what a business representative abroad actually does cover how to brief someone for this kind of trip: a written scope, a reporting deadline fixed before they travel, and, critically, no authority to agree a price, accept the business, or sign anything on your behalf unless you say otherwise in writing. Members of the Republic of Investors community who have sent someone to check a business before buying it tend to agree that the brief, not the person's seniority, is what decides whether the trip was worth it.

For a single visit, a mission is the simplest way to get someone's eyes on a business you cannot reach yourself. For an acquisition search that runs over months, across several targets, or into relocating once the deal completes, that is closer to hiring someone to run the project for you than booking a single trip.

A worked example

The figures and findings below are an illustration built for this article, for a business offered at £500,000, not a description of any real deal.

Treat the numbers only as a sense of how a finding on site turns into a specific ask at the negotiating table.

What to do next

Write your checklist before the seller sets a date, not after. Decide in advance which findings would only adjust the price and which would end the deal, using the same four-outcome logic our due diligence checklist sets out: note it, price it, hold money back against it, or walk away. Then, independently of what the visit shows, have your solicitor check the charges or liens register for the business, because a clean walk-through and an encumbered balance sheet are two different questions. If distance makes the trip impractical, brief someone to go in your place with the same list and the same limits on their authority, and treat their report with the same weight you would give your own.

Need someone on the ground? Hadri takes on missions: meetings, trade shows, conferences and site visits in any city, quoted per trip. Request a quote.

Common questions

Can a seller refuse to allow a site visit before completion? A seller can control timing and access, and it is reasonable for a visit to wait until after an initial offer or exclusivity period rather than happen on a first enquiry. A flat, ongoing refusal to allow any visit before you commit serious money is a different matter, and worth treating as a question in itself.

Does a site visit replace formal due diligence? No. It is one part of it, alongside the accountant testing the numbers and the solicitor checking the contract and the registers. A visit tells you how the business runs day to day; it does not verify tax position, contracts, or legal ownership, which need their own checks.

Does TUPE mean I automatically keep every member of staff I meet on the visit? Generally yes, if you are buying the company or the relevant part of its business: their jobs, terms and continuity of service are protected by law, with some exceptions such as redundancy or insolvency. Confirm the current position for your specific transaction with a solicitor, since TUPE's application depends on the detail of the deal.

What if the business is somewhere I cannot easily travel to myself? Send someone in your place: an independent representative, a trusted contact already in the area, or someone taken on for this specific trip, working from your checklist and reporting back under a fixed deadline. The further the business is from you, the more this step is worth doing properly rather than skipping.

Should I check for liens or charges before or after the visit? Either order works, but doing both before you commit to a price matters more than the sequence. A charge on the equipment you just watched running does not mean you cannot still buy the business; it means the price, or the structure of the deal, needs to account for who else has a claim on what you are buying.