Due Diligence

searcher profile

January 26, 2025

by a searcher in Dallas, TX, USA

What are the most critical red flags to watch for during the due diligence process, and how can I effectively address them to ensure a successful acquisition?

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commentor profile
Reply by a professional
from Bentley College in Miami, FL, USA
Due diligence involves addressing many critical areas, and the key focus points will depend on the business and your specific skill set. Legal and financial due diligence are non-negotiable essentials—you'll need to cover these regardless of the business. Beyond that, your priorities should align with the unique characteristics of the business and industry. Start by identifying and addressing the most critical risks or vulnerabilities that could impact the business.

For additional resources, explore the DueDilio Knowledge Center, where you'll find a wealth of articles, templates, and checklists to guide you. Feel free to reach out if you have any questions or need assistance.

Access free resources here: https://www.duedilio.com/knowledge-center/
commentor profile
Reply by a professional
in Detroit, MI, USA
On the financial due diligence side - it varies greatly depending on what type of business. For many service-based businesses (HVAC, Plumbing, etc.) one of the major areas is their revenue and cost recognition policies. Depending on those, profitability can be greatly skewed.

One universal thing is verifying any broker/seller addbacks. Shoot me a note if you want to discuss further! redacted
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