Just Elementary, Inc. » Business Opportunity For Sale, Business Tips, Negotiation » The Missing Picture: Due Diligence
The Missing Picture: Due Diligence
December 14th, 2010 | Comments Off on The Missing Picture: Due Diligence
While you are analyzing a business for sale and after you have agreed to a preliminary terms to purchase a business opportunity, you are going to have to do perform and finish your Due Diligence. A quick note, you should consult with and hire legal and financial professional s to assist you with the process. Having been involved in many transactions, I can share some insight with you about the process and what to look for.
Number 1 most important thing to figure out is why is the seller selling? Make sure it is a legitimate reason, such as a genuine retirement. Get to know your seller to the best of your abilities on a personal level. Meeting with the seller in casual settings away from the subject business can open the seller up to reinforce what you know and what they have told you to that point, or it reveal things that may not be apparent during business meetings. Watch out for Red Flags. Simply put, if you don’t trust the seller, then cancel the deal quickly and move on.
Number 2 is to differentiate between operational problems caused by the seller and the problems caused by the marketplace or industry trends. You can’t do much about industry trends that are dooming the business to obsolescence, but when you find that the seller is holding the business back by causing operational inefficiencies or misplaced priorities then you have an opportunity. Now you’ll need to honestly assess your skills and abilities and determine if you are up to the challenge of rectifying the problems caused by the seller.
Number 3 identify trends in the Industry. Make sure you understand the big picture for the business and the industries it is in. Are there new avenues, technologies, law changes, services that are coming that you can use to your competitive advantage to grow the business? If there are, you may have a business you can grow and make more valuable by the time you are ready to move on and sell the business yourself. To do that you will need to determine how long you plan to operate the business for. For example if you are looking to run the business for 10 years, then you should do your best impression of Nostradamus and make sure there still will be demand for the business.
Filed under: Business Opportunity For Sale, Business Tips, Negotiation · Tags: Buy, Buyer, Buying, Diligence, Due, Seller, Trends
Archives
- March 2015
- February 2015
- January 2015
- December 2014
- November 2014
- October 2014
- September 2014
- August 2014
- May 2014
- April 2014
- March 2014
- February 2014
- January 2014
- December 2013
- November 2013
- October 2013
- September 2013
- August 2013
- July 2013
- June 2013
- May 2013
- April 2013
- March 2013
- February 2013
- January 2013
- November 2012
- October 2012
- September 2012
- August 2012
- July 2012
- May 2012
- April 2012
- March 2012
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
Recent Comments
Most commented
Recent Articles
- Shark Tank Business Valuation and Negotiation Lessons Brand Yourself, iCPooch, Bee Sweet Lemonade, The Home T Shirt
- Tips for getting targeted search results on business for sale websites such as Bizben.com, BizBuySell.com, BizQuest.com and others
- Shark Tank Business Valuation & Negotiation Lessons Lumi Photo Transfer Kit, Sseko Designs, Boobypack, Gold Rush Nugget Bucket & Paint Brush Cover Update
- Shark Tank Business Valuation & Negotiation Lessons FunBites, Himalayan Dog Chew, Nuts ‘N More Update, BevBoy, Lip Bar
- Shark Tank Business Valuation and Negotiation Lessons Lumio, TurboPup, Bello Verde, Hold Your Haunches
- Established California General Builder Contractor’s License For Sale