The term used to investigate a business is due diligence and due diligence in this context is the process through which a purchaser evaluates a target business.
What matters are considered under the due diligence process?
Much will depend upon the nature of the target business and the market/ industry that it operates in. Key areas that are common across businesses include the following:
- Accounting/ Tax
- Legal/ regulatory requirements
- Human Resources- HR/ Employees
- Customers/ Clients
- Industry/ Sector/ Market
- Political, Economic, Social, and Technological factors
To undertake effective due diligence advice must be sought from professional people with a range of skill sets e.g. lawyers, accountants, business advisors, marketing consultants, financers etc.