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Q.What is due diligence?
A.When you are buying a business, one of the most important and time consuming endeavors is due diligence. Due diligence is the process by which the buyer of a business will acquire, review and analyze information relating to the business. The buyer needs this information to determine whether or not to proceed with the proposed purchase of the business. The information obtained should relate to all aspects of the business.
The buyer's due diligence review should include both quantitative information, such as sales and other financial data, and qualitative information, such as an assessment of the existing management, employee relations, vendor relations, internal systems, existing licenses, location, patents, copyrights, trademarks, and other matters. Sometimes the information to be reviewed can be quite technical, or industry specific. It is important that the person doing the due diligence review have a complete understanding of the information being reviewed.
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