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Due diligence

Looking for a handy -dandy, generic due diligence checklist.

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We are financial consultants to a group of investors whom we have their consent to manage their funds which is in our custody for cooperation in joint venture business investments.

Our areas of interest include Property Development and real estate, Health Care, Education and training, Mining and exploration, Energy, oil and gas,Technology, Software development, Agriculture, Manufacturing, Finance Services and Leisure.However, all viable proposals within reason will be considered.

Funds shall be made available to you as a direct investment loan at 3% interest rate per annual for a period of 2 or 30 years depending on what you prefer. You may contact us if you have interesting investment proposal for possible business collaboration for our study.

We look forward to your reply to enable us provide you with details or you may visit our website.

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Jesse Peterson
phone: (980) 239-7539

Jun 6, 2017
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Yours Sincerely
Jesse Peterson
phone: (980) 239-7539

Jun 1, 2017
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Charles, as you probably know, there are different levels of due diligence based upon the type of acquisition one is pursuing. In other words, you wouldn't really facilitate the same type of detailed due diligence on a manufacturing company as you would on a financial services company just as the due diligence effort for a $10 million acquisition is grossly different from a $100 million acquisition. Having said that, you have three (3) components that are most prevelant as far as due diligence is concerned when pursuing an acquisition, they are: Financial Due Diligence, Legal Due Diligence and Operational Due Diligence. Where as it has been suggested that you hire an attorney, and I couldn't agree more, depending on certain other specifics of the transaction it maybe necessary to hire an advisor which often comes flanked with counsel, both legal and financial in order to successfully complete the acquisition. As a 16 year veteran in the Private Equity industry, I have seen numerous transactions succeed and several fail as well, but in my opinion having the right acquisitoin team in totality will serve you best. If you have an interest in looking at a check list that my firm would have used in the past I can share that however, I don't think it would be in generic form, and you probably wouldn't want it to be too generic anyway.

Mar 9, 2010
Jon Holmquist
Edgemaster Model 400 sharpener
Marion County, OR

Top of the list should be "can you really love doing this business?" If you don't it will be kind of like in a marriage and "staying in it for the kids". Lousy way to live your life. You should first look for all of the things that you will HAVE TO DO every day and often well into the night. I would put that at the top of the list then look at are you going to get burned later on. Jon at Edgemaster Mobile Sharpening

Mar 9, 2010
Robert Cutler
New York County, NY

The list below only appears to cover discrete areas of financial due diligence. If you intend on doing any legal due diligence (which would be the smart thing to do in my opinion), you will have to hire a lawyer.

Mar 9, 2010
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Well, I can't tell you everything you need to look for but here's a few basics :
1. Look closely at the financials. Look at what the total cash flow is AND what the owners draw ( monthly pay from business) is. A lot of times people see good cash flow and think that they will be making good money but a lot of things fall under the category of cash flow. To find out what you'll really be making, look at the part of the financials that say " salary" , "draw", or "discretionary income" to a working owner. That amount is what you will mostly likely receive as spending cash IF you are a working owner. If there isn't any listed on the financials, be sure to ask the agent.
2. If you want to own but not RUN the business, look for businesses that state "absentee run" otherwise you will need to deduct from your draw for the expense of hiring someone to run it for you.
3. Make sure you find out everything there is to know about the property. Ask the broker to show it to you. As you walk through, if you notice anything that is damaged or doesn't seem right, ask about it. It you want it fixed before you purchase it, tell the broker that. Some sellers sell the business as is and won't make any repairs. Make sure you notate any damage and decide if it's worth all the repairs.
4. Ask about the rent! Some businesses are on a special lease with the property owner and a new one has to be negotiated when someone else buys the business but some have a lease that is transferrable to a new owner. Be sure to ask because rent is part of the overhead costs and if your overhead goes up, your profits go down.
5. Ask about any outstanding debt. If the seller originally took a loan to buy the business or equipment for the business, make sure that the seller is responsible for paying it off after the sale, not you. Some businesses come with assumable loans attached. You don't want to get stuck with someone else's debt.
6. Ask for tax returns. A good rule of thumb is to view tax returns for the last three years unless the business was established less than three years ago.
7. Ask if the seller is willing to finance any portion of the sale. Sometimes a seller is willing to finance some part of the sale even if it's not stated in the listing. Or the price might be negotiable. If you like a business but the price is higher than you think it should be, make a lower offer and see if the seller accepts. Most of the time, a seller is willing to come down on the price to get it sold.

I hope this will help you in your search for a good business. This is just a brief overview but it should help weed out the legitimate opportunities from the " full of potential" pie in the sky schemes.
Most people choose to have a lawyer or accountant review the financials just to be safe. I have a friend who's an accountant for a corporation and she reviews them for a set fee. If you need her contact information, you can reach me at

Mar 9, 2010

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