Wednesday, July 21, 2010

Due Diligence Checklist #1: Sustainability of Business

The process of buying and selling a company requires a detailed due diligence of all key elements of the business.

The points listed below are intended to be a checklist of SELLERS to know what to prepare and BUYERS to know what to ask for.


In this part of the review, the buyer will want to understand the potential economic value of the business he is buying. More specifically:

1. What is the financial business plan for the next 3-5 years?
2. What is the company's vision?
3. What are the company's core competencies?
4. What are the existing strategic alliances?
5. Are there synergies with the acquiring company?
6. What part of the product life cycle is this business in?
7. What new products are under development?
8. What new customers are under development?
9. What does the current order status and backlog look like?
10. How stable is the customer base?

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