Due diligence is the act of scrutinizing the details of an online business for sale as offered to verify and corroborate all claims made in the listing. Many buyers fail to provide adequate data that convinces a potential buyer to sign a formal purchase agreement and close a deal.
Once a buyer submits a written offer – called a Letter of Intent (LOI) – and it is accepted in principle by the seller, there is a due diligence period where the buyer is provided with detailed financial information and business statistics that prove the claims of the offer.
These should include most of the following elements:
There are likely to be other items to check off the list depending on the business model, but this should be the bulk of the due diligence items to prepare in advance. If a seller has these in order, it will not only expedite the due diligence period leading to a quicker closing, but it will also provide a level of trust and comfort for the buyer that will compel them to complete the website for sale transaction as agreed upon in the LOI (non binding).
David Fairley
President, www.websiteproperties.com
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