Checking a Business Before You Buy

How we check a business in three grades before you spend months and money on full due diligence, and why the value is in joining the dots.

The full picture is on the Buy a business page.

Transcript

When you buy a business, the seller tells you the story. It's their job to make it sound good. Your job is to find out what's underneath, before you spend months and money on full due diligence. We check it in three grades, each building on the last. Quick, thorough, and every figure sourced. Grade one: just a company name.

From what's on record, who really owns it, what it owes, what its accounts say over the years, and any red flags. A clear go, or park. Grade two: add the seller's pack. What the business really earns, the risks, the growth, and the key questions to put to the seller. Grade three: the full numbers.

Bank statements, contracts, the detail behind the accounts. Earnings checked, and a firm position to negotiate from. But the real value is in joining the dots. One fact on its own means little. Put a few together, and you know the question to ask in the room. Directors stepping down just as the business comes up for sale.

A website nobody has touched in years. Together, they point at how the business really wins its work, and who's left to run it. Machinery that new rules will soon make costly to keep. A material the business relies on that's on its way out. What happens to the kit, and the margins, when it has to change?

One buyer came to us with an asking price, a freehold and a growth story. Within days, he walked into the meeting with the right questions, knowing exactly where he stood. Before the heavy due diligence starts, know if it's worth it. Book a 15-minute call.