Due diligence in business assessments is an important aspect of ensuring that a click this possible merger, acquisition or investment is appropriate for the new owner. This includes looking at the financials of the company that is being targeted and analyzing a myriad of other aspects to ensure that the deal is a sound one. Due diligence can be a long and exhausting process. To maximize the value of it, it’s crucial to work with a dynamic team of experts from different business functions.
The first step in due diligence is to review general documents and records to understand the structure of the business from an organizational standpoint. This includes assessing the ownership and if there are any compliance or regulatory concerns. It is also crucial to know the company’s culture and leadership.
Due diligence also includes assessing the validity of key business processes and their documentation. This is focused on the frequency of business process testing and whether the documentation related to these tests are regularly updated. It is also essential to determine if the organization has prepared for unexpected changes to its operations. This will require assessing the capacity of employees to adapt to an entirely new business model, and how they will be supported.
Additionally, it’s essential to determine the effectiveness of escalation processes. This means identifying ways to spot, report and fix issues and making sure that third-party vendors have their own escalation policies. This is essential to avoid issues that could affect your business, particularly in highly regulated industries.