In a business sale, after the initial terms are decided in a letter of intent, the next step is due diligence.
That is when the buyer will review every element of the seller’s business in detail.
A buyer might walk away from the deal if something unexpected is uncovered, for example:
- There’s doubt about whether the seller really owns its intellectual property
- There are major liabilities that weren't previously disclosed
- Business assets or contracts are not easily transferrable
Engaging a lawyer and an accountant early can help prevent some of these things from becoming deal breakers. A pre-due diligence can find issues and fix them before the buyer ever sees them.
Working with my client on the sale of her logistics business, I went through all the contracts and corporate documents and fixed the problems before the buyer got access. That boosted her negotiation leverage and avoided delays, so she could close the sale sooner.
If you’re thinking about selling your company, are you sure that your books and records are ready for a close look? The sale will go much smoother and faster if the problems are fixed in advance.