Due Diligence

CONSIDERING BUYING A BUSINESS?

Before you complete you need to be confident that it is worth buying: due diligence
You will have undertaken suitable research and obtained specific information about the business. The next step is to verify the information you have been given. Once an offer has been made and accepted you will have an agreed period of time when you can access the business books and records. This is known as due diligence. The objective is to provide a realistic picture of how the business is performing now, and how it is likely to perform in the future. This procedure should also highlight any issues or problems which might need warranting or guaranteeing by the vendors.

You will normally see three types of due diligence:

  • Legal due diligence – This is undertaken by your lawyers.
  • Financial due diligence – This is undertaken by your financial advisers and Garratts are well placed to undertake this.
  • Commercial due diligence – The purchaser is likely to undertake much of this themselves but Garratts will assist where needed.

 

The extent of due diligence

Due diligence is about much more than the finances of a business. When this process is complete you need to know exactly what you are getting into, what needs to be fixed, what it will cost to fix, and if you are the right person to take on this business.

DUE DILIGENCE WILL GIVE YOU AN INSIGHT INTO THE BUSINESS AND ENABLE YOU TO DECIDE WHETHER YOU WANT TO BUY THE BUSINESS AND AT THE PRICE DISCUSSED.

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