Saturday, June 27, 2009
" How to buy and sell businesses" - Importance of Due Diligence
I wanted to take the time to cover one crucial component of any business buying or business selling-
Due diligence is the act of doing methodological research to uncover ANY, and I mean ANY, possible variable of what could happen before ,during, and after the purchase. This is perhaps the single most important part of ANY business buying venture. Due diligence research is the sole business buyers responsibility and this process should never be conducted half ass as this could cost you your life savings.
Here is one example of how due diligence can affect your business buying or business selling venture.
The actual physical location of a business can sometimes play a vital role in a businesses success as a lot of small businesses feed off of the walk in traffic bigger stores generate. Picture a big shopping plaza with some major chains in the mix with a number of small retail shops, coffee shops, eateries, etc, etc. Even in our current economic market these big department and chain stores generate masses of walk in traffic, now what would happen to all of those small chains if these big stores ended up closing down? A large portion of the walk in traffic would definitely slow down to a trickle and the small business owners would more than likely end up closing up shop as well. So in this particular example location was one of the most crucial parts of any of these small businesses in the same plaza succeeding.
As with starting or buying any business venture there are risks, but conducting in depth and rigorous “due diligence” will always help you determine the major pitfalls and problems that may lay ahead. In the situation above , if all of these small business owners would have done there due diligence properly ,they could have been prepared for what was inevitably going to happen after the big stores closed down.
So as you can see, due diligence is not always about income, profit and loss statements, tax returns, inventory, assets, etc, etc. - It is about any and every possible loose end that could ultimately cost you your life savings, your well being , and most importantly your families’ well being.
One more important fact, Do not trust these B.S. Do-it-yourself kits and software.
You are investing your time, effort, and money (not to mention other peoples as well) into a supposed SOLID investment, arm yourself with as much knowledge as possible and seek professional ,proven guidance from start to finish.
The lesson of the day- “ Do not be an arrogant idiot, conduct thorough due diligence ALWAYS”, and have your lawyers, accountants, and consultants review your results.
Make sure you arm yourself with the most comprehensive REAL LIFE information and processes involved in business buying and selling businesses , but also the ever important “due diligence”.
This is where our exclusive business buying and selling training package comes into play…
You will be receiving our three jam packed guides along with the REAL LIFE worksheets , contracts, and documents we have used for over the past thirty years. On top of that , you will receive a business valuation and consultation with the actual brokers and authors of our exclusive training course, right from the comfort of your own home.
Stay tuned till next time,