Services

Due Diligence
Due Diligence refers to the care a reasonable person should take before entering into an agreement or a transaction with another party.
The phrase "buyer beware" or in Latin "XYZ" dervived from the Roman tradition meaning that the buyer of goods or services was to use their own prudence in purchasing. Prudence demanded that the buyer investigated the purchase by becoming familiar with the trade invloved and using educated judgement by ascertaining facts and applying solid commercial judgement. It was expected that the rationale buyer would ask questions of the seller. The community took the view that a valid sale occurred when prudence was applied after due diligence occurred. If buyer's remorse occured after the sale, the custom was no refund was due if no due diligence was conducted. Courts did not award fool's damages for a sale that a buyer exercised no prudence at all, or fell below solid commercial judgement.

The tradition of due diligence extends today. A buyer of business assets engages CRXJEM to conduct due diligence for them. Prudence demands that a buyer employs expert advice before a purchase. Due diligence provides critical information in negotiation of sale price and terms before a business decision is completed. Otherwise, the commercial buyer is left to use gut feelings and suffer the consequences of an uneducated purchase.

What WE do in Due diligence Investigations

1) Gather information
2) assess risk
3) Apply methods of analysis
4)Advise

Starting with a basic due diligence plan, we in step 1 gather information from public and private sources. Public information maybe legal records. Private information is sourced either thru prurchase or obtained directly by CRXJEM. In step 2 the risks involved in the purchase are quantified unlike a general judgement call. This includes the reliability and accuracy of the information gathered. In step 3 we apply analysis tehcninques, carefully looking for bias, and using evidence obtained interpret the information and turning it into knowledge. Finally in stpe 4 advise, combing the knowledge we present our findings to the buyer in a way that the buyer may make an informed choice. We often present options to the buyers as well. Our advice is based on our dedication to helping clients make the most informed and educated decision given economic constraints. We recongnize that our trusted advice is helping clients make their best informed choice themselves.

The market and courts are unforgiving to buyers who fail to conduct adequate due diligence. When CRXJEM develops a customized due diligence plan, we address teh cost of making a bad choice, the price of making a bad economic decision.
Can you afford to make a gut feeling choice?
What's the Price of not conducting due diligence?
What's the cost of buying without due diligence?

Buying business assets include:

Real estate
Technology
New products or services
complimentary business acquistions
Other services (lawyers)

Note: Due diligence is key in price negotiations
Note: We don't specialize in industries but customize our methods of gathering information, analysis, and presenting information.
We customize for each client (individual attention), we know local markets (where geographic or demographic), we have expert knowledge (degrees) and we have the ability and expereince to apply our methods.

EXAMPLE: Accuracy and Reliablity

We look to the BOOKS or financial records

If books are UNADITED and UNreported - HIGHLY unreliable NO matter how accurate they may be

If books are reported - say to IRS in tax returns but unaudited - MORE reliable and accurate

IF books are Audited and Reported - More reliable and accurate

If books are audited , reported and INVESTIGATED by CRXJEM MOST RELIABLE AND ACCURATE. By investigating the books, CRXJEM cross checks information, verifies sources, runs financial models based on current economics to check for validity of records and adises clients.

NOTE: THink of all the puclic traded companies that years later restate earnings and issue nuew financals for past years.

EXAMPLE:
Public records

They are recorded accurately so highly accurate BUT if self reported, no audit, no government cross checks, then accurately reported but not always reliable.

Auditing is often just associated with accountants, but CRXJEM can investigate other business records, such as customer lists, customer data, supply chain information, purchasing records.

Our principle is that the more checking and investigating buiness records, the risk of failed asset acquistion is greatly reduced.