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The Due Diligence Process: What To Expect And How To Prepare.

The Due Diligence Process: What To Expect And How To Prepare.

When you’re selling your business, you can expect potential buyers to conduct a due diligence investigation. This is their way of verifying the information you’ve provided about your business and assessing its value.

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The due diligence process can be divided into three main stages:

Financial due diligence

Legal due diligence

Operational due diligence

Financial due diligence

Financial due diligence is all about verifying the financial information you’ve provided about your business. This will usually involve an accountant going through your financial records with a fine-tooth comb. They’ll be looking for anything that doesn’t add up or could be interpreted in a different way.

You can prepare for financial due diligence by making sure your financial records are up to date and accurate. You should also be prepared to answer any questions the buyer’s accountant may have.

Legal due diligence

The legal due diligence stage is all about assessing the legal risks associated with your business. This will involve the buyer’s lawyer going through all your contracts and agreements to make sure they’re watertight. They’ll also check that you have all the necessary licences and permissions in place.

You can prepare for legal due diligence by making sure all your contracts and agreements are up to date and in order. You should also be prepared to answer any questions the buyer’s lawyer may have.

Operational due diligence

Operational due diligence is all about assessing the operational risks associated with your business. This will involve the buyer’s team looking at how your business is run on a day-to-day basis. They’ll want to see things like your processes, systems and infrastructure.

You can prepare for operational due diligence by making sure your business is running as smoothly as possible. You should also be prepared to answer any questions the buyer’s team may have.

The due diligence process can be daunting, but it’s important to remember that it’s just a way for the buyer to verify the information you’ve provided about your business. As long as you’re prepared, you should be able to get through it with no problems.

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