Maximize Value, Perform Seller’s Due Diligence

Typically, buyers are better prepared to buy than sellers are to sell. Implication: sellers do not maximize sale value. Unfortunately, most sellers—small enterprises through large corporate sellers—do not perform a deliberate and thorough due diligence of the business they are selling. The tendency for sellers is to offer the company for sale, but not prepare the company and its key employees for sale. Sellers need to think through, strategize, and scrutinize all aspects of a sale before it is offered to the marketplace. There is nothing worse then buyers discovering problems (legal, human resource, operational, etc.) with your business and using them against you in sale negotiations. Just as buyers use extensive due diligence checklists to review and assess a potential acquisition, sellers need to perform a similar review before placing the company on the market.

While the particulars of a seller’s due diligence warrants a longer discussion, heed the lesson of proper-prior-planning; it does yield a higher value.