Buyer Due Diligence
Doing your due diligence on the front end can help avoid oversight and costly mistakes.
- Look at annual and quarterly financial information
- Review sales and gross profits
- Check the rate of return by product
- Look at the accounts receivable
- Business inventory breakdown
- Summary of debt and terms
- Copy of lease
- Article of incorporation
- Trademarks, trade secrets,
- Marketing & demographics
These steps taken by a potential buyer in order to satisfy personal and legal requirements, especially in buying or selling a business; will prevent any unforeseen errors. The buyer should perform a comprehensive appraisal of the business. This will establish its assets, liabilities and evaluate its commercial potential.