You may have heard about ‘due diligence’ when a business is being sold or taken over and wondered what it meant. If you want to sell or buy a business of your own you’ll certainly need to know just what due diligence means and how it’s applied.

In its simplest form due diligence is a comprehensive process that investigates a business to assure the intending purchaser that all facts and financial figures are as stated and that there are no unpleasant and unwanted surprises that have been concealed.
 
Due diligence sounds impressive but ultimately it translates into basic commonsense success factors such as "thinking things through" and "doing your homework".

We conduct a due diligence process to ensure that the business is "investor ready" and this covers the broad areas of ...

• Confirmation that the business is what it appears to be;
• Identify potential "deal killer" defects in the target and avoid a bad business transaction;
• Gain information that will be useful for valuing assets, defining representations and warranties, and/or negotiating price concessions; and
• Verification that the transaction complies with investment or acquisition criteria.