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How to Survive Buyer Due Diligence in Kansas

For many business owners in Kansas, one of the most challenging issues to deal with when selling their company is having to undergo the buyer due diligence process. Specifically, once all pre-purchase measures have been satisfied and an appropriate price range determined, a buyer may investigate your business before finalizing the sale. Much like when a person signs a contract to buy a home, a prospective business purchaser has the right - through due diligence - to thoroughly examine your business. Such investigation is typically invasive and involves a thorough review of your company's financial health and background, your tax status and other tax related issues, and additional aspects of your business.

When facing buyer due diligence, it is important to be prepared ahead of time in order to get through the process and sell your business. The following are some helpful tips:

  • Keep your buyer's attention focused to the positives. Since you will likely get to know your prospective buyer during the due diligence process, this is your prime opportunity to highlight the positive aspects of your business. For instance, even if you had a bad month or two, you can inform the buyer that this is typical for your company and you always make up for the profit loss in the following months. In other words, the more you highlight the strengths of your company, the less that the negative aspects will be such an issue.
  • Plan ahead. Buyers can sometimes take quite a while to complete the due diligence process, possibly causing business delays and other issues on your end if not handled properly. Make sure to consider the potential for time delays before engaging with your buyer so that you can make sure to keep up with corporate deadlines and satisfy the needs of your existing customers.
  • Hire a professional. Lawyers, accountants and financial planners can add significant value during the due diligence process. For example, they can help keep you well-informed during the process and advise you as to how to properly handle information requests from your prospective buyer.
  • Learn about your buyer. Taking the time to learn about your buyer and even getting to know them can help make the process a lot less painful.
  • Be accurate and honest. Exaggerating your finances or minimizing serious business losses can cause your entire transaction to fall apart within the blink of an eye. Be sure to take an upfront, honest and straightforward approach with your buyer and answer all of their questions as accurately as possible.

If you are considering the sale of your business or currently facing the due diligence process, it is crucial to work with a qualified Kansas City business attorney to help you. Don't take chances going about the due diligence process alone. Only a skilled attorney can guide you through the process and fully protect your interests during the pendency of the transaction. For more information on my Kansas City business services, I invite you to contract my office today at 913-498-1911 to schedule a free consultation.

Tags: Kansas Business lawyer

This entry was posted on Sunday, November 11th, 2012 at 2:33 pm and is filed under Selling A Business. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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