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In part one of this two-part blog series, we looked at some of the basic elements of the due diligence process during a business sale to keep in mind. Due diligence is one of the most important final parts of any sale, one that involves the buyer looking closely into several important parts of the business to confirm it's what they intend to purchase.
At Utah Business Consultants, we're here to offer a wide range of business sale services to clients around Salt Lake City and other parts of Utah. We provide everything from exit planning to business valuation services to help with distinct parts of the process, including due diligence. Today's part two of our series will look at some of the other key elements of due diligence to keep in mind, and what to think about during each stage.
Customer ListsOne major element that buyers will be interested in is the customer lists of a business, to see who their current customers are and how much potential there is for growth. It's important to be up-front about any customer contracts that may end soon, as well as any other agreements that could affect the buyer or the estimated value of the company.
In some cases, you may need to provide detailed contact information for customers as part of the deal, or at least confirm that you have all their relevant details. In addition, you should also be transparent with your customer loyalty data - how long have they been customers and what percentage of them stick around?
Down related lines, potential buyers will also want to understand more about the company's market share in comparison to its competitors. Can you prove that your business has a unique value proposition and is outperforming the competition? Understanding this can help to reassure buyers that they're getting a good deal.
Another key element of due diligence, particularly for SMBs, is understanding the key personnel at the company. This includes confirming that your executive team has extensive experience in their field, that they're properly trained and licensed to do their job (if necessary) and other important details about them.
Additionally, buyers will want to make sure that any key personnel are staying with the company after the sale and that they're properly incentivized to do their best work. This can help ensure a smooth transition and continued success of the business under its new ownership.
Overall, due diligence is an important part of any business sale process. Make sure you understand all the key elements involved so you can be prepared when it comes time to start the process. At Utah Business Consultants, we're here to help you every step of the way. Contact us today if you have any questions or need assistance with your business sale!