How should I not make due Diligence a headache?
Preparing for due diligence can be challenging, and when it
finally occurs most business owners are caught unprepared – mostly due to lack
of preparation and experience in the field. Also, industry veterans and
hard-nosed businessmen will find themselves in unfamiliar waters when it comes
to answering the laser-sharp questions about their organization from a due
diligence consultant. It needn't be that way though.
Ready for due diligence-Looking inside
Starting with your internal policies always is a good idea.
This involves re-looking at structures – either in place or missing in the
organization structure. Review all of the management's work contracts, too.
This gives you a fantastic opportunity to streamline your old processes and
implement new policies.
To get a great image of where you're standing on a monthly
basis, prepare a report from MIS (Management Information System) at least a few
days later. This may look like a time- and money-consuming exercise, but it
might actually prove to be a game-changer in terms of smooth sailing through
the due diligence process. It could also provide some useful insights for the
future.
Getting prepared for due diligence-Looking out
On the outside front, you should begin to make a checklist
of all registrations that may be necessary for your business. Being updated
with statutory compliance is also crucial. If all of this seems a bit complex,
reaching out to a trusted financial advisor might be reasonable.
This is where you need to seriously consider enlisting the
checklist as your virtual assistant with the help of an accountancy service
provider or a one-stop portal. Although it may sound like a single person
helping you out, it is generally a team of experts – financial advisors and
strategists with profound field expertise. They'll also help you pass your
sales contracts, licenses. As, well as
other legal documents fine-toothed with a comb.
Moving to Key Performance Indicators (KPIs), the Consultant
for Due Diligence is expected to be involved in how the business makes profits.
Take a deep dive into marketing spending ROI (Return on Investment) and
segregate & evaluate your clients – B2B vs B2C and organic vs. inorganic.
Find out the marketing networks from which they come, how much money they spend
on you, and so forth. There is that little information that counts.
Most significantly, recognize and rectify possible time
delays or shortcomings. If you can't rectify all of those problems, you'll have
a decent argument ready and a straightforward plan for how you're going to
change the same thing going further.
The trick is never to get caught off guard by the surprises
the consultant could throw at you with due diligence. The only way to guarantee
this is by completing your assignments well in advance, or by getting someone
eligible to do it for you. A little bit of planning can really go a long way to
securing the contract!