Steps Ahead... Commercial Due Diligence
Commercial due diligence (DD) is critical in providing a prospective buyer with an in-depth understanding of a targets current position and long-term viability. It allows all parties to make informed decisions and go into negotiations with an honest picture of the business.
Generally, the commercial due diligence process will consist of the following:
- Reviewing the business plan
- Assessing how realistic the business goals are
- Analysing the market and the companys position within it
- Predicting the future of the market and the targets place within it
- Looking at market trends
- Analysing the target's competitive position and relative performance
- Reviewing the customer base
- Assessing whether projected revenues are likely to be reached
- Investigating pricing and margins
- Assess whether forecasts are in line with market expectations.