Thinking of buying a business instead of starting one from scratch? If so, make sure you do your proper due diligence on the business before you pay. I have been watching “Restaurant Impossible” and I am flabbergasted at the price people supposedly paid for businesses that rent. What did they buy? Ancient furniture and fixtures, old recipes, and some goodwill, as a CPA I am appalled?
So here is a basic due diligence checklist, granted there are many details under each heading but this is a good overview.
- Organization in good standing
- Financial Information
- Physical Assets
- Real Estate
- Intellectual property
- Employees and employee benefits
- License and permits
- Environmental issues
- Taxes
- Material contracts
- Product or service lines
- Customer information
- Litigation
- Insurance coverage
- Professionals
- Articles and publicity