Your free training on how to buy a business without cash is here: https://bit.ly/44EVInM

In this video, business acquisition strategy expert Jonathan Jay explains what due diligence is when buying a business and what to expect during the process. As both a business seller and buyer, he has seen the process from both sides and offers valuable insights.

Due diligence is carried out before you buy an existing business. It is the process of thoroughly researching and verifying the information provided by the seller about the business being sold. Jonathan explains that there are three types of due diligence: financial, legal, and commercial.

Financial due diligence is where you make sure the numbers stack up. Owners can sometimes be poor at recordkeeping, so it's important to check the financial information provided by the seller. Jonathan suggests asking the owner of the business for the full accounts to get a more complete picture.

You should also get the management accounts, bank statements, VAT returns, and Corporation Tax return to build up a financial picture of the business.

Legal due diligence is typically undertaken by the law firm drafting the sale and purchase agreement. It covers copyrights and patents, lawsuits, and investigates any legal processes that are underway. Your lawyer aims to make sure you are protected, and if due diligence shows something isn't as good as you thought, you can restructure the deal to mitigate your risk.

Commercial due diligence is undertaken by the business buyer or a professional firm. It confirms that products and services are fit for purpose and there are no complaints. Checking reviews of the business can also help you get an understanding of the business and confirm the goodwill exists.

If you're looking to buy an established business, this video is a mustwatch. Jonathan Jay's insights and advice can help you make informed decisions and avoid costly mistakes. Whether you're a firsttime buyer or a seasoned investor, understanding due diligence is critical to making successful business acquisitions.