How to Sell Your Business, page 26

Managing Due Diligence, continued

As preparation, you should make sure that everything is in order as much as possible. Essentially, you should do your own pre-review. (You may want to hire a consultant as an objective third-party to help with this.) Consider “what would I want to know if I were buying this business?”

You should fix any problems you can that you encounter. You should document any problems that you cannot fix. As part of your initial sales negotiation, prior to exclusivity, you should bring these problems to the attention of the buyer (hopefully there are still competitive buyers out there).

Any problems you have found will also be found by a buyer during due diligence. It is much better for you to bring them up at an earlier stage. If the buyer is still interested, then they are water under the bridge by the time due diligence is performed—and cannot be used to renegotiate.

The general rule is that there should be no surprises during due diligence. If you make sure that you done the kind of thorough third-party inquiries into your business that a buyer would, you can likely achieve this objective.

Conclusion

Selling a business is a fulltime job requiring ardor, cunning, and honesty. If you pursue it with the tenacity that led you to own your own business in the first place, you will likely be successful.

While there are many professionals who can help with various aspects of the selling process, ultimately it is your responsibility, and “the buck stops” with you.

After reading this article, you should have a good idea of the process and the steps that you will need to take.

Author's Biography

Harold Davis is a strategic technology consultant, hands-on programmer, and the author of many well-known books.

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