Commercial Services Division

Business Sales

(800) 618-2113

home for sellers for buyers valuation listings contact

There comes a time in each transaction when the microscope comes out.
The buyer will be checking virtually every detail of the business. The term, "due diligence" has been defined in many ways; noted business brokerage author Russell Brown defines due diligence as:

"The process of investigation by a potential buyer of a business's claimed and actual financial and operational performance."

For buyers, it is essential to put the proper contingency language into an offer to allow for due diligence. Whether the form of the offer is a Letter of Intent or a Purchase and Sale Agreement, it must specify that the buyer may withdraw without penalty if the business does not meet certain conditions upon inspection.

The actual process of investigation can involve dozens and in some cases more than a hundred documents and functions. For sellers, it is essential to prepare beforehand so the transaction doesn't bog down.

It is not the responsibility of the broker to perform the buyer's due diligence. The process is typically carried out by the buyer and his/her accountant and other financial representatives. Our office can provide extensive due diligence checklists. They can serve the seller in the preparation phase, and the buyer in the investigation and analysis phase.

Again according to Russell Brown, the due diligence process occurs in roughly four phases:

• Examination and Review
  
• Interviews and Discussions
  
• Confirmation, Verification, and Validation
  
• Calculations, Computations, and Analysis

We have years of experience in these areas, and can provide you with guidance and feedback.

If you would like to have a no-charge phone session to explore how we assist buyers and sellers in the due diligence phase of a transaction, please call us at (800) 618-2113. Our broker in charge of business sales, Gary Richards, will be happy to talk with you. He has been through due diligence himself and can relate to what you will be going through.

If you would prefer to contact us by e-mail please do so, at