Barry, I agree almost 100% with everything Julie Barnes has ever uttered! And Robert Gresham offers excellent insights; however, without arguing with him, I would mention one word (or many words) of caution.
Mr. Gresham states, "Talk to vendors, suppliers and customers, even go to them in cases where supply or revenues derive from a concentrated base." While I agree with him in principal, it is terribly dangerous to do this in a cavalier manner. For one thing, any Non-Disclosure or Confidentiality Agreement you might have signed, prevents you from contacting the very people he is suggesting you question. This means that you need to be legally, very careful in conducting these kinds of interviews, and it must be done with the agreement and cooperation of the Seller, and your own Attorney to guide you, as well.
Moreover, timing and methodology in conducting these kinds of investigations are critical, even if you do not have such an Agreement. Questioning Customers or Suppliers has to be in such a way that you obtain the information you need, without alarming them. You don't want to do things in a way that would cause a Customer to go elsewhere, because of a possible sale of the business you are looking to buy. Or for a Supplier to cut off what could be an excellent, ongoing relationship with the business, because of his uncertainty about you, or the current Owner's methods in dealing with final invoices - which could result in the Seller's inability to continue operations. I have seen this happen!
As a Business Broker, I see the sale of any business as a team effort, with the Buyer and Seller, the Buyer's Accountant, the Seller's Accountant, the Buyer's Attorney and the Seller's Attorney all working together for a win-win transaction. As a Business Broker, a large part of our role involves bridging the communications between all parties. (At one settlement, I wore a referree's uniform and a whistle, in order to lighten the mood and get two attorneys who hated eachother communicating in a more relaxed atmosphere!)
So, I am not disagreeing with Mr. Gresham; I value legal input, on all transactions. But I am stating that caution MUST be used, in this area.