DueDiligencer’s Web-Business Due Diligence

Verify the information claimed by the seller is represented accurately!

Averagely 40% of the web-businesses transactions figures are exaggerated, misrepresented and/or not accurate. Mostly, these are the actual errors reliant on the broker or seller, but averagely 20% of such transactions are merely scam attempts of the seller to trick the buyer into over-pay for their proposed web-business.

Once the Buyer agrees to buy the web-business, we get into working with the sellers to verify for if the claims of traffic and revenue made by them are real and exact. Once our verification is completed, we will provide you with the easy-to-read and understand report about our findings. Check what is included in the information given on this page.

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Earnings Verification:

It is much probable that the significant monetary value of the web-business is much reliant on the revenue it generates. Which makes the Dependable Financial Verification the most important part in the purchasing process, possibly saving good amount of money from the respective purchase deal. We directly work with the seller for verifying their earnings as they are generated from its sources, performing observations and recommending what and where required.

We check for:

Earnings Verification
  • Earnings and Gross Sales Inspection: Do the amount of generated earnings are exactly same as claimed by the seller? We perform thorough inspection to mark the differences among verified and seller’s claimed amounts while using realtime screen sharing, accessing the online accounts as well as complete inspection of all the transactions.
  • Authentication of Revenue: Are you sure that all the claimed revenue by seller is really drawn only from the offered website? We fully inspect for the evidences of transaction which are drawn through other web businesses but processed on the same online payment methods in a wrongful attempt of boosting up the revenue.

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Expenditure Evaluations

The unmentioned expenditure is a very normal problem with online businesses. Normally the seller forgets reporting the expenditures paid through other or personal payment method accounts, and in some cases sellers willfully attempt to hide in order to boost the earnings. For instance, marketing costs or special/dedicated server costs etc.

As there is no simple gauge to measure all the expenditures, but with the help of our experience (of maintaining and/or keeping in view the similar business niche standards) we can mark the gap or inaccuracy in expenditures.

We check for:

  • Possibly missed expenditures: We inspect for the proposed expenses of website with the standards of our web profiling to recognize and report any expenses that seller forgot to add.
  • Potential differences against the Business Niche standards: e evaluate the claimed or reported amounts of expenses against the related niche business operating standards.
Expenditure

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Chargebacks and Refunds

Numbers of Chargeback and Refund Verification:

The ratio of claimed refund and chargeback will often be left un-inspected, but without its verification certainly the potentially detrimental data will be missed. Huge amount or increasing numbers of refund is normally a matter of supply or quality of product. Same way for the increasing numbers of chargeback, but can make the connected merchant account vulnerable at risk of getting closed.

We take the screen-shots of all the transactions took place in merchant account for the last 12 months, and inspect for the dissimilarities among the claimed chargeback and refund numbers and the real figures.

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Tax Returns Verification:

Where applicable, we fully verify the tax returns submitted by sellers to recognize the accuracy of claimed income.

Keeping the verified tax returns applied on the business will further assist in funding (SBA Loans etc.) to buy the business or leverage its purchase.

Tax Returns Verification

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Traffic Amount

Traffic Level Verification

The selling price of the web business is not always ascertained from the traffic it receives, but the visits certainly have the direct relation to sales in online business. Decline or Escalation of amount of traffic are the initial alerting signs of serious matters that might arise.

The claimed traffic by seller is compared to the realtime live data that is reported by trustworthy analytics. Any potential differences we inspect, will be reported and brought to the attention.

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Claimed Sources of Traffic Verification:

Many times, seller claims that traffic is being received through several offline or online sources, but recognizing the accuracy of claims can develop a substantial dissimilarity.

We inspect the imperative differences among claimed traffic sources and those from where actually they receive it. For such kind of traffic which cannot not be easily recognized (like: visits coming through the ads in newspaper, magazine, billboards etc.), we evaluate for if such claims are acceptable and normal for the web business model and the business niche industry it is related to.

Traffic Sources

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Verification of Mailing List

Verification of Mailing List:

When the Web-based business is reliant on the customer data or email for promotion of its services, poor data or increased counts or subscribers will finally fail to provide the results for when the new owners takes over.

If the business has customer or subscriber mailing lists, we verify the existence, size and health of that list.

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Commitment and Agreement Verification:

For the Web-based businesses that have the contractors, key suppliers or in agreements with employees, their such relations often play very important role in the successful operation of the Web-Business.

We inspect the agreements among important stakeholeders in the web-based business to evaluate there legitimacy and existence.

Commitments and Agreements