Despite the process being long-winded, ‘Due Diligence’ is a very useful tool for any buyer to have when considering the prospects of a company. It allows for a thorough examination and leads to comfort of mind because the buyer knows what to expect in the future if they make a deal. So if you are a potential buyer, allow me to put forward 5 useful tips which should lead you to good due diligence:
1. Find the focus area of the company straightaway. Do this first and nothing else because it will save you a great deal of time.
2. Hold an early meeting with the seller to narrow the accountants’ and solicitor’ enquiries. It will avoid any information slipping through the net and make the process more efficient.
3. Keep the seller on your side. Ultimately, they have power over how much information they give, since they are not legally obliged to do so, and in turn how useful your due diligence is. The more amicable you are to the seller, the easier the process will be.
4. If any ‘deal-breaking’ information comes up, inform the negotiation team as soon as possible and bail out!!
5. Listen to your accountants and solicitors and if all looks good, go ahead with the investment.
For further information on Buying and Selling a Business, please contact Izaz Ali on firstname.lastname@example.org.