Your Investment Checklist

This guide is a series of questions to help you make better investment decisions.

Here are seven ways to improve your due diligence process.

  1. Business Basics

  2. The Customer

  3. The Product

  4. SWOT Analysis

  5. Financials

  6. The Team

  7. Growth

Business Basics

Let's begin with mastering the basics.

  • Do I want to spend a lot of time learning about this business?

  • Can you describe how the business operates, in my own words?

  • Can I explain how this business makes money?

The Customer

Begin with the end in mind. The customer. Bonus points if you're the customer.

  • Who is the core customer of the business?

  • Who is the ideal customer?

  • What is the customer retention rate for the business?

  • What are the signs a business is customer oriented?

The Product

To understand a business, you need to touch and feel its value. And the product is a good place to begin.

  • Do you understand the product or service offered by the company?

  • Will people still be using this product or service in 20 years?

  • Is this a mission critical product or service?

  • How does inflation affect the business?

  • Do you have a list of all products?

  • Is there a unique marketing distribution channel?

SWOT Analysis

Do you remember learning about strengths and weaknesses in business school? Well now it is time to apply those to the real-world.

  • Does the company have a competitive advantage? Is it sustainable?

  • Can the business raise prices without losing customers?

  • What is the competitive landscape, and how intense is the competition?

  • What are the main reasons a customer would switch to a competitor?

The Team

Now that we've covered the quantitative piece of investing, let's discuss the qualitative piece.

You see it's easy to screen companies based on profit margins and growth potential. But it's more challenging to figure out what's going on behind the scenes.

  • How would you evaluate this business if you were to become its CEO?

  • What type of manager is leading the company?

  • How did the manager rise to lead the business?


Now the fun begins. We've covered customer and product but nothing about the finances. Let's dive deep into the financials

  • Has the company had consistent earnings growth?

  • How does the business make money?

  • What are the fundamentals of the business?

  • What operating metrics do you need to monitor?

  • What are the key risks the business faces?


Now business is about growth. And if you're not growing you're dying. This is an important element. Do not overlook it.

  • Have past acquisitions been successful?

  • How does management make M&A decisions?

  • Does management outperform its competitors?

Need a deeper dive? I recommend reading the Ulimate Due Diligence Checklist.