Are you looking to buy or invest in a business and think you’ve found the right one? As a buyer, it’s essential you examine the business carefully. Doing so will ensure you haven’t missed anything that could come back to bite you down the track.
Buying or investing in any business presents a risk, but this can be mitigated through a thorough due diligence approach. There are many questions to consider in any potential business purchase, including:
- Are there clear strategies in place enabling future growth?
- Does the business have the assets and resources required to pursue this growth?
- Have you identified the risks within the business?
- Are the financial statements and documentation correct?
- What do the minutes of management meetings tell you?
- How strong is the intellectual property protection?
- Is the plant and equipment in good working order?
- Does physical inventory match what’s in the accounts?
- Does the business have the appropriate licences?
- Are there any apparent structural or business risks?
- Are you confident the business has the right people to continue running?
- Are contracts in place with key suppliers, customers and staff?
Conducting due diligence helps you minimise the chance of unwanted surprises after the transaction is completed. BDO can help you identify and manage transaction risks and setup the right corporate structure for the acquisition.
We can also ensure you develop a full understanding of what you’re buying by working with your legal advisers on:
- Contractual matters
- Warranties and indemnities
- Purchase price adjustments.
To get a detailed examination of your potential business transaction, talk to a BDO adviser today.