Due Diligence
Due Diligence entails a series of business verifications and validations that should be conducted by an experienced,
neutral third party professional before a businessperson or investor buys a franchise or business; completes a merger or acquisition; or participates in a strategic venture or joint alliance.
This comprehensive process involves detailed analysis of sales, trends, financial records and other data: all extremely important to protect your best interests whenever you enter a business relationship or transact business with another entity.
The most common due diligence application involves the purchase of a business venture. Even the savviest buyer may experience clouded judgment based upon his/her desire to complete the transaction and not lose out on the great “opportunity” just identified. The broker assisting the buyer and/or the seller also has a vested interest in completing the transaction.
By inviting a neutral party to thoroughly verify and validate all aspects of your proposed business transaction or acquisition, you protect your interests and ensure the best-possible outcome.
Our highly-experienced business consultants and seasoned accountants dig deeply into all business information and interpret the key variables to ensure you a sounder basis from which to make your critical investment decision.
GBS Strategies is NOT like the typical consultant:
We are experienced business owners ourselves who have and continue to run successful, profitable firms here in the United States and abroad. We at GBS know the “beast” from within.
Our Due Diligence services include all the following protections:
- Validation of accounting practices used by seller: analysis of financial statements can be performed to identify whether any accounting practices have been used to alter the financial attractiveness of the business.
- Past financial performance validation: verification can be done to ensure that the financial information provided to buyer – as foundation of negotiated business value– is in line with past financial performance of the business as supported on official documents, (financial statements, tax returns, sales tax, payroll reports, add back analysis.)
- Multiple location analysis: if there are multiple locations and the financial data allows it, a drilled-down analysis of financial performance by location can be performed.
- Past sales performance: an analysis of prior business sales figures can be conducted, along with identification of any negative trends that might require further analysis/research.
- Future performance indicators: we can research the existence of any factor identifiable in the information provided by seller that might negatively influence the future performance of the business.
- Future operational performance: We can evaluate expected financial performance of the business under the planned buyer’s operational scheme
- Business value validation: based upon the above points and the market comparables, a recommended range for the price that should be negotiated will be provided.
- And last, but equally as important, a TVA or Transferability of Value Analysis, which is a search for clues to uncover any portion of the value of the business that may not be transferable from seller to buyer, along with the estimation of such portion.
Due Diligence is essential to protect your interests and peace of mind! Contact GBS Strategies to help ensure your potential franchise, business, acquisition or other investment is financially-viable and strong.
