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Reverse Due Diligence to Improve Business Value

Business Owners

Reverse Due Diligence to Improve Business Value

By , February 6, 2020
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Impact Your Business Value

An important step in the Succession and Exit preparation process is reverse due diligence. This process is similar to the due diligence a buyer or an investor undertakes when looking at your business. It helps you to get prepared and get a better Business Value. At Succession Plus UK we give you a comprehensive list of all the things that you need to get together in terms of documentation. You easily identify any areas where you’ve got gaps.  If you’ve got information that’s out of date, it’s an opportunity to get up to date.  In some cases you can’t find original documents.  The level of preparation will impact buyer confidence.  It impacts the value of your business.

Ready for a QUICK SALE?

It’s surprising how many business owners come to us asking us to sell their business quickly.  Yet when we give them a list of the information needed it takes them weeks to collect it all. The information we ask for are management accounts — balance sheets, profit and loss statements, and a breakdown of clients, leases, contracts and agreements. They often don’t have it, can’t get it or have to wait for their accountant to prepare it.
Once it’s done it can often prove impossible to reconcile with the statutory financial statements which have already been submitted.

It is important to be on top of this early on — it will make your business look much more professional and much less risky once you are asked to provide information.

 

What’s Essential?

Focus on getting the following up to date and ready for inspection:
• Financial statements and management accounts
• Trend analysis for the last 12 months
• Top 10 customers — spend, margins, terms
• Legal documentation — shareholders certificates up to date, all licences and IP current
• Employee contracts up to date and entitlements properly accounted for.

For an expanded list, please refer to the Succession Plus website: www.successionplus.co.uk

Darryl Bates-Brownsword

Darryl Bates-Brownsword

Partner | Succession Plus UK

Darryl is a dynamic, driven Business Mentor and Coach with over 20 years of experience and passion for creating successful outcomes for founder-led businesses. He is a great connector, team builder, problem solver, and inspirer – showing the way through complexity to simplicity.

He has built 2 international multi-million turnover businesses; one now operating in 16 countries. His quick and analytical approach cuts through to the core issues quickly and identifying the context. He challenges the status quo and gets consistent, repeatable and reliable business results.

Originating in Australia, Darryl’s first career was as an Engineer in the Power Industry. Building businesses bought him to the UK in 2003 where he quickly developed a reputation for combining systems thinking with great creativity to get results in challenging situations.

A keen competitive cyclist, he also has a B Eng (Mech) Engineering and an MBA.