Due Diligence – I don’t need it (ya right)

You have been searching for various businesses for sale and now you have found that perfect business to buy. The business is represented by a reputable broker. You are comfortable with the terms, and now you wish to enter into contract and proceed with the due diligence phase. Everything you have been told by the seller and broker sounds good and feels right. So what’s next? How deep do you need to dig?

Deep my friend. Yes, most brokers are very reputable. But remember they only get paid when the deal closes. And remember also that the broker is representing the seller, not you.

So what should you be digging for? Here is a partial list:

1) Negative business trends;

2) Negative industry trends;

3) Expected but undisclosed competition;

4) Any hint of a personal matter that would restrict the seller from selling;

5) Any partner, spouse, shareholder, or related party that would restrict the seller from selling;

6) Existing or past credit problems with banks or suppliers;

7) Any pending litigation against the company;

8) Any claims, liens, or encumbrances against the company or company real estate;

9) Unpaid income, sales, FICA, unemployment insurance, or other taxes;

10) Timely filing of all tax returns;

11) Expected but undisclosed loss of one or more major accounts;

12) A current disaster recovery plan;

13) A current management succession plan;

14) Stale or nonexistent policies and manuals (including personnel manual, training manual, safety manual, and sexual harassment policy)

15) Retention of key employees;

16) Retention of key accounts;

17) Recent bad publicity;

18) Expiring/ renewal of property lease;

19) Leases that are not assignable;

20) Restrictions on business or property expansion;

21) Capital assets that are at or near their expected life;

22) An established reserve for capital improvements;

23) Obsolete equipment and machinery;

24) Overvalued inventory;

25) Product obsolescence;

26) Expiring licenses, patents, franchise agreements, etc.

27) Difficulty in obtaining raw materials, products, or services;

28) Expiring vendor or supplier agreements;

29) Recent increases in all types of insurance rates;

30) Employee awareness regarding the business sale;

31) Customer awareness regarding the business sale;

32) Vendor and supplier awareness regarding the business sale;

33) Non compliance with safety and environmental requirements;

34) Potential labor union or other employee related issues;

35) Any web site related issues.

As you can see there are many issues that really need to be investigated. Many are very technical. You will likely need to enlist the help of other professionals for assistance. An attorney and an accountant are a must.

Just remember, when you are searching businesses for sale, think ahead. Do not trust everything the broker and seller tell you. You are making a huge decision; make sure it’s a good one.

Transportation Costs Drive Small Business Concerns

Taking clients out to lunch, delivering goods and performing service duties are what drive entrepreneurs to success. Microbusiness owners and the self-employed depend on transportation to provide their products and services. However, escalating energy costs are making it more difficult to survive and profit as a microbusiness owner.

An online poll from the National Association for the Self-Employed (NASE) asked members how rising gas prices are affecting their business. Over 70 percent of microbusiness owners agreed that rising gasoline prices are significantly or moderately hurting their businesses. Nearly half (43 percent) of respondents increased prices to compensate for the growing costs of fuel.

"Microbusiness owners often depend on their cars to connect with their consumers or use shipping services to mail products," says NASE president Robert Hughes. "Most people did not account for such increases in their travel or shipping budgets for the year."

This year, the self-employed will need to revise their budgets to accommodate increasing energy costs. In the meantime, several options to stabilize energy costs are supported by the association members who opted into the survey. Tax subsidies for energy companies to develop new energy-efficient technologies, as well as tax credits to drivers who buy cars with fuel-efficient technology, were supported by two-thirds of respondents. Additional drilling in possibly oil-rich areas within and offshore of the U.S. appealed to 67 percent of members who responded to the poll.

The National Association for the Self-Employed is the nation's leading resource for the self-employed and microbusinesses, and brings a broad range of benefits to help entrepreneurs succeed and to drive the continued growth of this vital segment of the American economy.

High-Tech Training For Small Businesses-Available 24/7

There's good news for owners of small-to-mid-sized businesses who want a better understanding of the technology they have come to rely on.

It's no secret that small businesses can gain big benefits by using Internet and computer technology wisely. Fortunately, there are now a number of online resources offered by major tech firms that provide access to information and insight that was once available only from consultants or in a classroom setting.

For example, HP offers business templates and images such as customizable, easy to use brochures, and letterhead, more than 35 how-to guides and over 160 articles that small-business professionals can download from its Web site: www.hp.com/sbso/. Select how-to guides include tips on creating marketing collateral, networking a color printer, and building cost-effective print, copy and fax solutions.

It also has an online learning center at www.hplearningcenter.com that offers free, instructor led classes where small-business owners can expand their knowledge and learn about wireless technology, networking solutions and more.

For those who want additional, on-demand training, the company offers Learning Curve. This service transforms a users' desktop into what's described as a virtual training and support center available 24/7.

Content is delivered via the Web and refreshed frequently, eliminating the need for many expensive on-site training programs.

Microsoft also offers a number of resources, including a Web site dedicated to the needs of small business owners: www.microsoft.com/smallbusiness.

Among the Web site's features is a calendar of free live seminars on small-business technology topics, offered by specialists from the Microsoft Connections team. These events are held in numerous U.S. cities during the year. Small-business owners can also sign up for free Web casts and training on technology issues. Within its Small Business community, small-business owners can participate with their peers in discussion groups, where topics range from how to configure e-mail systems to why some printers use USB cables.

The Web site also provides product information, plus tips and strategies for using Microsoft products such as Office and Small Business Server, and for marketing, management and other issues in running a small business. A major section of the site is dedicated to helping small businesses with computer security; this section includes security checklists, quizzes and interactive videos.

Another feature that small business owners find particularly useful is HP's online chat function for small businesses. It provides a real-time resource, where detailing the types of tech questions small businesses have and the areas in which they are spending their time and resources.

Users can also get instant technical help online with HP's "Ask The Expert." This live technical support is available 24 hours a day, seven days a week.

It makes it possible for users to chat live with HP technicians to help solve their most challenging business application or software issues.