How to do 'vendor due diligence' when selling a business [checklist]

Posted by James Price | JPAbusiness on 28-Jul-2021 02:00:00

Runner preparing-1

When business owners come to see us, wanting to sell their business, we often get involved in providing what we term ‘vendor due diligence’.

When conducting vendor due diligence for clients, our role is basically to ‘pretend’ we are the buyer.

We look at a range of business health factors including:Vendor due diligence checklist cover

  • financial performance
  • business performance
  • staff and organisational aspects
  • contracts, systems and suppliers
  • how the business creates and drives value in terms of its point of difference in the market
  • forward order book i.e. the pipeline, to understand the true nature of the business as a going concern
  • how exposed the business might be to individuals or particular customers or suppliers.

These are all things we have talked about in our Due Diligence Checklist for business buyers.

The Vendor Due Diligence Checklist is similar, but it’s coming from a different angle.

It’s about doing preparation to make sure that when a purchaser ‘opens the bonnet’ on your business, they’re able to easily see how the business is performing.

 

Vendor due diligence critical component of business sale preparation

We created the Vendor Due Diligence Checklist as part of our free eBook: How to Prepare Your Business for Sale.

If you are a vendor looking to maximise value from your sale, it's important to do the preparation early, so the transaction process can be as streamlined and effective as possible.

Conducting vendor due diligence with an independent advisor’s support will ensure critical information about your business opportunity is gathered, collated and clearly presented long before purchasers come knocking.

 

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JPAbusiness offers a wide range of services for business buyers and sellers. If you are considering buying or selling a business, contact the team on 02 6360 0360 or 02 9893 1803 for a confidential, initial discussion.

 

James Price 2018 smallJames Price has over 30 years' experience in providing strategic, commercial and financial advice to Australian and international business clients. James' blogs provide business advice for aspiring and current small to mid-sized business owners, operators and managers.

 

Topics: Selling your business, Template, Checklist, business advice, selling a business, Business advisor, Business selling, business broker, vendor due diligence, JPAbusiness, Parramatta, Central West NSW, business sale, business sale transaction advisor

 
Disclaimer: The information contained in this blog is general in nature and should not be taken as personal, professional advice. Readers should make their own inquiries and obtain independent, professional advice before making any decisions, taking any action or relying on any information in this blog. 
 
 

 

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