What is Due Diligence for Buying a Business? New Report Defines 8 Action Steps

What is Due Diligence for Buying a Business? New Report Defines 8 Action Steps

If you’re new to buying a business, you may be a bit baffled to hear attorneys or business brokers tossing around the phrase “due diligence.” Fortunately, a new report from Yale School of Management on due diligence in business sales outlines the steps needed for a successful process.

Due diligence exists for a simple reason. To paraphrase the report’s authors, Yale lecturer A.J. Wasserstein and Yale MBA case study writer Andrew Seth Jacobs, due diligence is how you make sure the business you think you’re buying really is the business that’s been described to you. You don’t want to take any information in the sale at face value–you need to verify all the facts.

How to Get An Affordable Quality of Earnings Report

How to Get An Affordable Quality of Earnings Report

If you’re buying a small business, you need to know if the financials the seller gives you are accurate. Do the numbers paint a clear picture of how this business makes money and how much net profit it generates, or is it a warped view?

To find out, smart buyers commission a Quality of Earnings (QoE) report. The QoE report provider investigates the reality behind the figures. Then, they make adjustments to the financials as needed. The buyer gets a better sense of what this business will likely earn, post-sale. And that’s what business buyers need to make smart decisions.

How Smart Business Buyers Create a Due Diligence Checklist

How Smart Business Buyers Create a Due Diligence Checklist

When you’re considering buying a small business, there’s a lot of information you need to collect. You want all the data you can get your hands on during the due diligence process, to make sure you understand every aspect of the business. That’s how you make sure your valuation is accurate and you don’t overpay. Experienced buyers keep their due diligence investigation organized and make sure they glean all the information they need by using a due diligence checklist for buying a business.

How to Hire Due Diligence Experts: 10 Important Questions to Ask

How to Hire Due Diligence Experts: 10 Important Questions to Ask

You probably know you need experienced people to help you with due diligence for a company purchase–but maybe you’re wondering how you’ll know if someone is the right professional for your situation.
How can you choose the right due-diligence pro? Below is a list of ten important questions to ask, when you interview due diligence providers of any type.

Website Due Diligence:  3 Major Red Flags When Buying Content Websites

Website Due Diligence: 3 Major Red Flags When Buying Content Websites

If you are looking to acquire a profitable content-based website, you will need to perform extensive due diligence. There are many moving pieces to a website that can make or break a deal. In this guest article, Mushfiq Sarker shares his experience in content website due diligence and the 3 major red flags to watch out for when analyzing deal flow.

Everything You Need to Know About Business Due Diligence

Everything You Need to Know About Business Due Diligence

When it comes to business acquisitions, the significance of the due diligence process can’t be understated. Having prior knowledge about all aspects of your new investment or acquisition will save you from a massive headache in the future. Business due diligence allows you to make an informed decision with all the facts.

Quality of Earnings:  What is it and Why it’s Important

Quality of Earnings: What is it and Why it’s Important

A quality of earnings report (also referred to as a QOE report) is a vital part of due diligence when selling, buying or investing in a business. If you’re selling the business, it is referred to as a sell-side quality of earnings report. If you’re buying or investing, it’s a buy-side quality of earnings report. The difference has more to do with who’s requesting the report and why than it does with the report’s analysis and contents.

How Long Is A Due Diligence Period When Buying A Business

How Long Is A Due Diligence Period When Buying A Business

What is a due diligence period? Buying or investing in a business is a big decision. The due diligence period is an opportunity to dig deeper into a company’s legal, financial, and operational aspects before you commit to a final purchase. This is your chance to confirm the accuracy of the seller’s representations, as well as to discover any important information the seller might not have disclosed.