How to Handle Due Diligence when Buying a Business
It goes without saying that a business broker Azusa is the first professional you should hire when searching for a business to buy. The reason for this is because a broker has more experience in the field and will help navigate hurdles that may get in the way. So-Cal Business Brokers has handled hundreds of business sales. We understand the ins and outs of marketing and how to get the best deal for our clients. A lot of work goes into due diligence. Here is how we can help with this.
Submission of the letter of intent
In the sale of a business, due diligence starts once the letter of intent is submitted by the buyer to the seller. The letter of intent is what outlines the duration of due diligence. Our business broker Azusa will help draft the letter of intent. When doing this, we account for the fact that the length of due diligence varies from one business to another. We draft the letter based on the type of business you want to purchase. If you came to us as a business owner, we will help you understand the details that the letter of intent should cover and the duration that is fair for due diligence.
The main purpose of due diligence is to validate the information provided by the business seller. Thanks to our years of experience, we will be able to get more in depth information about the business you want to buy. We will also ask all the right questions. The documents we review include but are not limited to the following:
- Profit and loss statements
- Balance sheets
- Credit card statements
- Employee handbooks
- Lease agreements
- Vendor contracts
We review every document that pertains to the business you wish to purchase. Our mission is to ensure we give you a comprehensive report by never leaving any stone unturned.
Let you know if it is okay to move forward
Due diligence is meant to help a buyer determine if he is ready to move forward with the purchase. As your business broker Azusa, we collect all the information we can about a business, and evaluate it keenly so as to give you solid advice on purchasing a business. The only off limit is interaction with the employees and customers during due diligence.
If the buyer is still interested in moving forward with the purchase after due diligence, the letter of intent will be translated into a purchase agreement. If the buyer is not content, he can decline the letter of intent.
Due diligence is an intense part of business sale. You need the best team on your side to facilitate the process and advise you accordingly. We are here for you. Contact us now to learn more about our services.