Due Diligence When You Buy WebsitesReprinted with permission from VotanWeb.comDue diligence is the period of time during which you will be able to access the company's books and records to verify that all the information you have been told so far is true and accurate. Most often, people mistakenly believe that due diligence is simply the time to check the financial condition of the company. While this is true to some extent, proper and effective due diligence goes well beyond financial aspects. Of course, you want to be sure that what you've been told is true, but realistically, even if the numbers are exactly as they were presented to you, then what? All you would have is confirmation of the past, but absolutely no idea of ​​what the future might hold for the company or the industry. The Right Approach to Due Diligence Is Now the Time to Look for Business Problems? Is it time to strictly check the numbers? Is it time to refute what the seller told you? Although each of these approaches is somewhat valid, none is absolute. Of course, you'll want to use some of each of these strategies, but effective due diligence is about being able to actually "check things out." Without a doubt, your approach is to use this period to determine whether or not the future looks bright for the company and the industry. To do this, you need to investigate much more than just the financial aspect. Of course, the various financial statements will give you a picture of the past and perhaps a glimpse of the future, but the past is over. You must carefully review sales, marketing, employees, contracts, customers, competition, systems, suppliers, and legal and corporate issues. You want to end the due diligence period knowing exactly what you're getting into, what needs to be fixed, what the costs are to fix them, and whether you're the right person to take the helm to put the necessary plans in place to fix them. carrying out a project. a bright future for the company. In other words, learn everything before you buy! How much time do you REALLY need? Each seller and each broker working for the seller will try to negotiate the shortest due diligence period possible. I've heard of situations where this was limited to a week or so.