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    Pricing & Support Due Diligence  (Page 14 of 14)


    The following page contains a detailed due diligence checklist that has been compiled from many years of M&A projects.

     

    While this is one of the most extensive and comprehensive due diligence checklists available for free on the internet, you should consult your lawyer and investment banker as they will likely have a few additional suggestions.

    XIV. SUPPORT SERVICES AND PRODUCT PRICING

    1. Discuss the economics behind (1) Product fees, (1) license fees and (2) maintenance fees, (3) other revenue producing fees.
       
    2. Discuss current margins and growth in margins for (a) Products and (b) maintenance services.
       
    3. What pricing advantages does the Company have versus its competitors?
       
    4. Discuss the Company’s pricing strategy and contract terms.
       
    5. Describe the Company’s proprietary products, systems and technologies with specific reference to economics underlying the offering.
       
    6. How are upgrades delivered to the customer?

      a) Are customers charged for upgrades or is this tied to a maintenance contract?

      b) Are upgrades made available via the web, on a CD or both?
       
    7. Does the Company perform any product customization? If so, discuss the economics behind this offering.
       
    8. Describe the Company’s support function. Is this 24/7?

     



     

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