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From the monthly archives: October 2017

We are pleased to present below all posts archived in 'October 2017'. If you still can't find what you are looking for, try using the search box.

Performing Successful Due Diligence In A Business Sale

Performing due diligence on a business being considered for purchase should be conducted much like a surgical procedure. The operation should be an organized examination of the vitals of the company. It should also be approached knowing that this is an invasive phase of the sale process for the owner.

 

This stage of buying a business begins once you have made your offer and the seller has accepted. A contractual agreement has been entered into between the buyer and seller outlining the price and terms of the sale. The contract is contingent upon the business passing "inspection," which is the due diligence period allotted to the buyer.

 

Since it is the buyer's responsibility to uncover any potential problem areas of the business, it is important to be prepared. Depending on the size of the business, a buyer will typically have about two to four weeks to complete the process.  Having a checklist in hand to present to the seller at the beginning of the process will enable the seller to gather all the information in a timely fashion.  This will give you enough time to confirm all material facts of the business and validate what the seller has represented. The buyer, being the leader of the procedure, may call in specialists, such as an attorney to examine the legal aspects of the business and an accountant to scope the numbers.

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Reasons For A Business Sale

The reasons for selling a business can be divided into two main categories. The first is a sale that is planned almost from the beginning or by an owner who knows that selling is or should be a planned event.  The second is exactly the opposite – unplanned; the sale is motivated by a specific event such as health, divorce, business crises, etc. However, in between the two major reasons, are a host of unpredictable ones.

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