As comrade Saakhov said, “It is never early, never too late. Although in this case, it may be too late.”

Why is it important to check the company before buying?

Kate L. (her real name was changed to preserve the confidentiality of the client) owned a restaurant called “Girls in Moscow.”

Kate was sure that buying such an establishment in the United States would be an easy task for her.

She received information from a broker that there was a restaurant for sale suited to her needs. But, unfortunately, Kate did a cursory inspection of the business by going there in the guise of a guest, and she liked everything.

Then she decided to make an offer right away. After a short trade, she entered into a contract. The broker said that 10 days were allotted for due diligence. But by an unfortunate coincidence, this date overlapped with the days of her Caribbean cruise. When she returned, Kate reassured herself by the fact that she had already seen everything in the restaurant. The owner seemed to be a very pleasant person, so she proceeded to close the deal.

After owning the business for a while, Kate discovered that the chef and a restaurant manager has been working without employment authorization documents: in other words, they were undocumented immigrants. Two weeks after Kate bought the business, the two undocumented workers were arrested and deported.

Thus, the restaurant that originally had a management structure was beheaded. It not only stopped working properly but, most importantly, it stopped meeting the L-1 work visa requirement.

And then Kate, with trembling lips, read the letter from the immigration service which said - "Attention to Denial". 

If the girl had followed the rules for buying a business, she would have been successful. An example of a successful business acquisition can be seen here.

Problems that can be encountered during the due diligence:

The main problem is that people who buy a business in a foreign country don`t know what to check.

Compounding the problem is that the structure of the deal gives them very little time to do this. And in general, no matter how much time is provided, it will still be not enough. Read more about the due diligence schedule in our article.

The volume of what needs to be checked can be completely overwhelming for one person.

But there is good news! CLASS The Business Due Diligence will give you an idea of ​​how these problems can be solved, each of them individually and all together.

  1. A short Due Diligence period can be partially compensated for by carrying out part of the verification before you contact the seller.
  2. Lack of knowledge of what to check can be leveled by careful study (CLASS The Business due diligence).
  3. You can attract qualified people, but the process of working with them must be set correctly. CLASS The Business Due Diligence will tell you how to set a task for the specialist to check exactly what you need and, of course, how to meet the deadlines that are set by the contract. It will also be useful to read the article "Who checks the business"

You can learn more about how a business audit should be conducted in our class.

What you need to do to conduct successful due diligence:

Проверка бизнеса когда начинать 3

  • The due diligence process should begin as soon as you find out the name and the address of the company. Based on these details, you can get a significant amount of information from open sources.
  • The time frame is very tight. The owner, in case of receiving an alternative offer, can withdraw from the contract if you don`t meet the verification deadlines. So, you would have to start all over again.
  • Engage professional consultants; help them do their work correctly and on time by clearly setting tasks and deadlines for them. Otherwise, you will not get either the information or the results you need.

Read What Our Clients Say (Google Reviews)

  • Absolutely thrilled with my experience at Florida Buy and Sell and especially working with Alyona! She was professional, courteous, and incredibly knowledgeable, making my business buying transaction smooth and hassle-free. Their expertise and dedication to customer satisfaction really stand out in the industry. Highly recommend for anyone looking to buy or sell business with confidence. A true gem in Florida’s market!
  • I enjoyed working with Alyona Safonova as a business broker, and I cannot recommend her highly enough! Alyona is a true professional with a deep understanding of the market and a talent for finding the perfect match for her clients. She guided me through the entire process with expertise and patience, always available to answer my questions and address my concerns. Her dedication and hard work resulted in a successful sale that exceeded my expectations. If you're looking for a knowledgeable, reliable, and results-driven business broker, look no further than Alyona Safonova! 💼👍
  • I've been dealing with Florida Buy and Sell in my professional capacity as an immigration attorney assisting foreign individuals in buying businesses in the U.S. I can attest to the high degree of diligence displayed by Florida Buy and Sell in all business transactions I witnessed. My primary point of contact, broker Alyona Safonova, has always been responsive to my clients' inquiries and meticulously collected all financial documents necessary for the effective transaction.