ue diligence can seem overwhelming, but having been through the process many times both as executives of businesses going through M&A transactions and as advisors we can make it far less painful as an extension of your team.
AS A SELLER you want to make certain that your data is organized and accurately represented to avoid scaring away a buyer or lowering your potential exit value. Lack of order and clear presentation of data can also lead to claw backs after an acquisition – claw backs are exceedingly painful.
AS A BUYER you want to be certain that you’re getting value and are well aware of the risks/synergies. Buying a business is risky, and risks should be outlined in a disclosure schedule with the ability to withhold escrow for misrepresentations. Potential synergies should be identified with a clear action plan to unlock synergies post acquisition.
2 take-aways on due diligence and buying or selling a business:
- Crucial Part of The Team: Most buyers and sellers just don’t have extra time or resources to dedicate to due diligence. You still have a business to run. Due diligence is a crucial part of buying a business and it’s important that you or your advisor really put in the time required. We can serve as an extension of your team with the experience and extra hands you need to have a smooth sale/purchase.
- Organization: When you’re selling a business, you want to make sure that all data is organized and properly represented. Honesty is always the best policy and the truth will surface eventually. It’s best to be upfront, organized, and prepared to answer a lot of questions.
To say the least, due diligence is daunting and can be a difficult process if you lack the time and resources to execute properly. As former CFOs and executives who have lived through this process successfully, we’re here to help. It’s our goal to make the process of buying or selling a business as easy as possible for you.