The Rough Start Guide to Due Diligence

Buying or investing in a business means accepting more than its profits. You may also be accepting its debts, contracts, customers, employees, systems, weaknesses and history. Due diligence is how you find out what is really there before the deal becomes difficult to reverse. The Rough Start Guide to Due Diligence explains how to investigate a business systematically, test the claims being made about it and identify the risks that can affect value, price or the decision to proceed. Written for first-time business buyers, investors, founders and business leaders, it explains professional due diligence without assuming that the reader is already a lawyer, accountant or corporate-finance specialist. Topics include: planning a due diligence investigation testing evidence and management claims analysing customers, markets and competition investigating management and key-person dependency financial due diligence and quality of earnings working capital, debt and cash ownership, contracts and intellectual property operations, assets and technology cybersecurity and supplier dependency identifying red flags and concealed problems knowing when professional specialists are required understanding how findings affect price, structure and contractual protection The book also includes practical due diligence checklists, an information request list, management interview questions, a red-flag register and an example due diligence report. The objective is not to remove every possible risk. It is to understand enough of the right things to make a better-informed decision.