Check Lists:Management/Due diligence Business acquisition

Due Diligence and Business acquisition checklist

This check-list may be used of due diligence and acquisition of smaller business operations. Note that this is a check list - not a prioritized list!

• Sale and marketing
  • Evaluation of customer database quality
  • Evaluation of reputation in market (Company name /domain name ).
  • Is there any ongoing customer claims?
  • Any other legal cases?
  • How much sale is only related to the current management?
  • Evaluation of any part of the sale related to too high marketing cost?
• Evaluation of Technology level Physical and staff education level.
• Staff
  • Are the staff well paid?
  • What is the cost of reducing the size of staff?
  • Evaluate the hidden pension cost due in future to the staff.
  • Other staff qualities

• Evaluation of physical values (remember to include software licences).

• Evaluation of stock
  • Has it any real value?
  • How to prove that it is not obsolete?

• Are the supplier agreements fair and of any value?
• What is the cost of the required service level?

• Business procedures
  • Are they fair to the business units?
  • Is there any project accounting?
  • Is there an implemented quality management system - Is it working?
  • Is there an implemented project management system..?

• Accounting
  • What is the quality of the accounting procedures.
  • What special events has enhanced the results over the last 24 months?

• Evaluation of Business software: Is it standard systems or custom made that will be very costly to maintain.
• Why is the Business for sale?