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Reverse Due Diligence to Improve Business Value

Business Owners

Reverse Due Diligence to Improve Business Value

By , February 6, 2020
Cash Flow is Business Value

Impact Your Business Value

An important step in the Succession and Exit preparation process is reverse due diligence. This process is similar to the due diligence a buyer or an investor undertakes when looking at your business. It helps you to get prepared and get a better Business Value. At Succession Plus UK we give you a comprehensive list of all the things that you need to get together in terms of documentation. You easily identify any areas where you’ve got gaps.  If you’ve got information that’s out of date, it’s an opportunity to get up to date.  In some cases you can’t find original documents.  The level of preparation will impact buyer confidence.  It impacts the value of your business.

Ready for a QUICK SALE?

It’s surprising how many business owners come to us asking us to sell their business quickly.  Yet when we give them a list of the information needed it takes them weeks to collect it all. The information we ask for are management accounts — balance sheets, profit and loss statements, and a breakdown of clients, leases, contracts and agreements. They often don’t have it, can’t get it or have to wait for their accountant to prepare it.
Once it’s done it can often prove impossible to reconcile with the statutory financial statements which have already been submitted.

It is important to be on top of this early on — it will make your business look much more professional and much less risky once you are asked to provide information.


What’s Essential?

Focus on getting the following up to date and ready for inspection:
• Financial statements and management accounts
• Trend analysis for the last 12 months
• Top 10 customers — spend, margins, terms
• Legal documentation — shareholders certificates up to date, all licences and IP current
• Employee contracts up to date and entitlements properly accounted for.

For an expanded list, please refer to the Succession Plus website: www.successionplus.co.uk

Christine Nicholson

Christine Nicholson

Christine is a Chartered Management Accountant with a Law degree who brings 25 years of wisdom, know-how, and experience of working with SME’s. Her long and varied career has included working overseas, rescuing technology companies, building a healthcare business from scratch and running a zoo.

She started her first successful multi-million turnover business in 2002 and has grown business ventures for others including a bankruptcy to 8-figure exit in 18 months. Christine’s engagement consistently gets her clients increasing their turnover with improved profitability and fewer working hours.

She has saved clients thousands and increased the value of their businesses by millions. Since 2008 she has generated over £100m of crystallised value in business exits.

Christine is also an author of 3 books on Finance, Business Management and Technology businesses. She is a seasoned speaker and Professionally Accredited Member of the Association of Business Mentors.