Dealing with the Due Diligence Stage of the Business Sale Process
During the due diligence stage of the business selling process, the vendor opens up their business to scrutiny. To make sure the business purchase does not collapse at this stage, it is important to maintain buyer confidence and reveal any undisclosed issues.
In general, due diligence is carried out to investigate the commercial, financial, and legal aspects of the business. If you are a seller, you have to concentrate on these aspects to make sure they will survive the scrutiny. You can make this possible by considering the following tips:
Think Like a Buyer
Even if you are required to be as transparent as possible, you may still have some requests from the buyer you hesitate to grant. Often, these include demands to speak to your customers, suppliers, or employees.
To decide on this kind of request, put yourself in the buyer’s shoes. Determine if the request is something you would wish to review if you were the buyer. If you think so, then you need to permit it if you have decided to sell my business UK.
Protect Yourself against Possible Information Leakage
Before the start of any due diligence, think about entering into a non-disclosure agreement with the potential buyer. This will make sure the other party will not divulge your sensitive information it may get to anybody other than their advisors.
Also, only allow the buyer to access our management team or some major senior staff members. Make sure your contracts of your employees contain appropriate confidentiality provisions.
Preparing early for the sale and due diligence can go a long way in ensuring a successful sale. You want to ensure major information and documentation like accounts or contracts are readily available. Also, make sure you respond to queries in a timely manner.
Do Not Surprise Buyers with Undisclosed Problems
The last thing you want during the due diligence stage is surprising buyers with a legal claim that has been dormant for some time or a customer complaint that has been ignored and has currently escalated. Otherwise, your buyer will question other information they may find out and lose trust in the sale.
As due diligence is always a part of any business sale, it is reasonable enough to pre-empt any possible issues. Keep in mind that surprises may also come from the buyer. For instance, they may decide to concentrate on a different acquisition and defer your business.