ArticleBiz.com :: Free article content
Authors: Maximum article exposure. Publishers: Reprintable article content.
BROWSE ARTICLES
ArticleBiz.com Home
Featured Articles
Recently Added Articles
Most Viewed Articles
Article Comments
Advanced Article Search
AUTHORS
Submit Article
Check Article Status
Author TOS
PUBLISHERS
RSS Article Feeds
Terms of Service

Using the Due Diligence Period Effectively
Home Business
By: Jessica Fialkovich Email Article
Word Count: 391 Digg it | Del.icio.us it | Google it | StumbleUpon it

  

When a business owner accepts a buyer’s letter of intent (LOI) to acquire their business, the buyer gets the opportunity to perform due diligence as outlined in that LOI. The offer to purchase a business is contingent on the successful completion of the due diligence period. Due diligence is meant to open the paths of communication between the buyer and seller to discuss the business on a granular level so the buyer can truly understand the reality of the business acquisition. Generally all topics are on the table with the exception of speaking directly with customers or employees (because of confidentiality considerations).

Using the due diligence period to validate the information the business owner has provided about their business is one of the many key aspects of using due diligence effectively. The buyer will have access to the financial documentation of the business including credit card statements, balance sheets, and tax documents. Due diligence is also when the buyer can take a deep dive into the business’s contracts with vendors, suppliers, and customers which can help them identify any concerning areas of concentration or opportunities for growth.

The buyer can also learn more about the operating structure of the business from the organizational structure and leadership roles to their strategic marketing plan and market research projects. During due diligence the buyer and seller will be able to get to know each other much better and will quickly be able to see if the buyer will be a culture fit for the business as well, which is a very important aspect of a laying the groundwork for a successful business acquisition.

At the end of the day using the due diligence period effectively (and exhaustively) is the best tool a buyer has to make sure they are buying a business that is right for them, suits their business ownership goals, and skill set. Ultimately, if issues arise during due diligence the buyer can decline their LOI, receive their escrow deposit back, and move on. But if due diligence goes according to plan they can officially accept the LOI offer and sign the asset purchase agreement (closing documents) to purchase the business.

To learn more about the process of buying a business or selling a business, we invite you to visit our website.

Jessica Fialkovich is a mergers & acquisitions expert, small business advocate, and award-winning business owner. Her mission is to help business owners leave their legacy and exit successfully. Over the past 5 years, Jessica has overseen $65 million in transactions, and mentored 1,900+ business owners on buying and selling a business. Currently, she’s the President of Transworld Business Advisors - Rocky Mountain, Colorado’s top business brokerage firm. Visit tworlddenver.com for more information.

Article Source:
http://www.articlebiz.com/article/1051648479-1-using-the-due-diligence-period-effectively/

This article has been viewed 45 times.

Rate Article
Rating: 0 / 5 stars - 0 vote(s).

Article Comments
There are no comments for this article.

Leave A Reply
 Your Name
 Your Email Address [will not be published]
 Your Website [optional]
 What is three + seven? [tell us you're human]
Notify me of followup comments via email


Related Articles


Copyright © 2019 by ArticleBiz.com. All rights reserved.

Terms of Service | Privacy Policy | Contact Us | Submit Article | Editorial