What You Should Know About Due Diligence Before You Sell Distribution Business

When it is time to sell distribution business the first thing you should do is bring in an experienced business broker. At So-Cal Business Brokers we work with a team of the most experienced business brokers in the nation. Our team knows what buyers are looking for in a distribution business and how to find the right buyers and sell fast. In our experience selling all manner of businesses, there are two stages we believe you need to be familiar with before you list your business with us: discovery period and due diligence period.

The Discovery Period

After helping you meet up with qualified business buyers, the next thing the buyers will want to do is ask all the questions they may have without the expectation of complete answers or proof. The discovery period is done to help the buyer determine if they should make an offer or not. Buyers are quite thorough in this stage because if they make an offer and change their mind based on something that could have been found in discovery they may be banned from accessing our additional listings.

When you want to sell distribution business here are some of the questions buyers strive to answer during discovery. Understanding these questions will help give better answers that compel them to make an offer. The good news is our business brokers will be by your side all through to ensure you don’t scare buyers off.

  • Do I really want this business?
  • Do I have the skills and know-how to run it?
  • Am I prepared for the hardships that come with business ownership?
  • Do I have the staff needed to take over?
  • Are the seller’s numbers adequate for the price I am offering?
  • Do I feel comfortable with the number of suppliers and their stability?
  • Is the business’ marketing budget and traffic sustainable?
  • What licensing is needed for the business?
  • Is financing available?

With these questions in mind, our team will help you prepare your business sufficiently for the sale. Some of the things we do include getting you out of the equation by hiring a new management team, documenting all the business processes and also offering financing if possible among other things. We do all this before listing your distribution business.

The Due Diligence Period

After the discovery questions have been asked and verified the buyer will make an offer. This opens the door to more serious questions and the search for proof. The due diligence stage gives the buyer the opportunity to do the following:

  • Review third party documentation to verify financial information provided by the seller. This includes bank statements and merchant statements.
  • Speak with vendors to establish continued positive relationship
  • Talk with employees to ensure continuity.
  • Set up an LLC
  • Close out financing

The above list is incomplete. There is a lot that has to be done to sell distribution business. Give us a call today and take advantage of our free, no-obligation consultation with our experienced business brokers. We are always happy to hear from you and offer the assistance you need.

Sell Distribution Business