A practical episode on financial, legal, and commercial due diligence, acquisition risk control, seller claims, deal terms, and why larger established businesses can be easier to finance and assess.
Listen to the EpisodeEpisode 293 | Runtime: 36:00 | Audio Episode
Hear the full episode on acquisition due diligence, validating seller information, assessing risk, and choosing between small and larger business acquisitions.
Three practical lessons for buyers assessing acquisition targets and structuring safer deals.
Financial, legal, and commercial due diligence each test a different part of the seller's story, from accounts and tax records to ownership, contracts, customer reputation, and goodwill.
Filed accounts, full accounts, management accounts, bank statements, VAT returns, and corporation tax records help buyers test whether revenue, profit, cash flow, and seller claims are credible.
Bigger established businesses often have better records, stronger management, broader staff depth, and more asset value, which can make lender conversations more compelling than very small owner dependent deals.
This episode gives buyers a structured view of due diligence before acquiring a business. Jonathan Jay breaks the process into financial, legal, and commercial due diligence, explaining what each workstream is designed to prove and why the buyer should not rely on seller confidence, headline profit, or informal record keeping.
The financial section focuses on the documents that matter, including full accounts, management accounts, bank statements, VAT returns, corporation tax returns, and Companies House filings. The legal section covers ownership authority, intellectual property, patents, copyright, lawsuits, liabilities, and how adverse findings can lead to a restructured deal rather than an abandoned transaction.
The episode also features Ian, an experienced dealmaker, discussing redundancy, entrepreneurship, asset purchases, earn-out thinking, strategic acquisitions, and lessons from buying and selling businesses. The closing discussion compares small and larger acquisitions, making the case that larger businesses can provide better records, stronger management depth, more financing options, and less dependency on one owner.
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