When it comes to investing -be it a merger, property acquisition or starting a company- due diligence is a lot like checking the tyre pressure before a long trip. Without it you’re almost guaranteed to run into trouble somewhere along the way. But is it worth it to entrust due diligence consulting firms with the task of assessing the potential of an investment? Let’s take a walk.
A lot goes into the due diligence process. It generally revolves around a checklist of viability indicators, such as:
* Strategic planning. For example, is the merger suitable or necessary going forward?
* Assessing financial projections. Sometimes it’s more profitable to work with what you have already.
* Analysis of financial records.
* Understanding of consumer preferences and tastes.
* Getting to grips with the various tax related implications.
As you can see, it’s definitely not for the faint at heart. Investing is all about planning and looking as far into the future as possible. So I wouldn’t advise you to do it yourself.
