M&A Talk: #1 Podcast on Selling a Business For New Sellers: Financial Due Diligence – Why It’s Important to Prepare for the Sale of Your Company
Sep 6, 2023
Patrick O’Connell explains the financial due diligence process during a transaction and gives advice to sellers on how to prepare their company for sale. He discusses issues that arise during diligence and highlights the biggest mistakes sellers make. The importance of preparation and hiring a CPA firm is emphasized. Overall, the podcast provides valuable insights for potential sellers.
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Importance of Seller Preparation
- Sellers must prepare thoroughly and engage the right advisors early to avoid delays and complications.
- Getting your house in order before starting the sales process is critical to success.
Half of Sellers Underprepare
- About half of sellers underestimate the preparation required for financial diligence.
- Many think providing a few financial statements suffices but don't realize the depth needed.
What Financial Due Diligence Entails
- Financial due diligence involves a thorough review of 3+ years of detailed monthly financial data.
- Sellers should expect to provide extensive documents like customer lists, contracts, and bank statements.