What is Due Diligence?

Due diligence is critical to a successful business. A company conducts due diligence and produce a due diligence report which may be a summary review of the business or an extensive analysis of the business.

Who does due diligence?

Due diligence is performed and due diligence reports are prepared by:

• business buyers
• business sellers
• business managers
• independent business consultants
• due diligence services
• business or real estate brokers
• bankers
• accountants
• attorneys
• financial planners, and
• anyone involved in business management

Why do business need to do due diligence?

Most of the time, the reason for a due diligence or a due diligence report is because of the ownership transfers. When a business owner needs to sell the business, setting the price is key. By performing due diligence, the business owner can know the strength and weaknesses of the business.

What is the due diligence process?

Due diligence process usually comprises of 2 stages:

• discovery, and
• interpretation

During the discovery stage of due diligence, the buyer of the business and the seller of the business. Due diligence can either result in a sale of the business, raised prices, or a deal killer. By using the results of due diligence, either the business seller or the business buyer can drive a better bargain.