There are times when conducting your due-diligence is a legal requirement, and other times when it pays to go far beyond just checking the boxes. Part of the challenge of running a successful business is knowing where to draw the line when it comes to risk. Too much risk mitigation and your business is like a ship that refuses to leave the harbour. Too little risk mitigation and it`s a ship heading straight for the rocks. Our business is to deliver market-leading due-diligence services, not to advise on the level of protection each business needs. Nevertheless, we know a fair bit about risk and here are 5 tips to help make your due-diligence practices more effective. 1. Whichever sector you`re in, set some clear red lines in advance.
Effective due-diligence is about investigating, and so it makes sense to know what you intend to do with the information you uncover. You need to know in advance which revelations you can accept and which you can`t, because the further into the process you get the less likely you are to want to abandon your project. 2. More due-diligence information isn`t everything, but it helps
If you`re meeting your legal obligations and not having any issues, then you`re going to be tempted to keep your due-diligence spend as low as possible. Depending on your industry, this may be the right approach. More often than not however, companies tend to know surprisingly little about who they`re dealing with and that leaves them open to all manner of trouble. 3. Make the most of due-diligence technology
Standards vary widely in the Business Intelligence services community, and one issue that consistently comes up is that many providers have been slow to adapt to business in the 21st century. The days of sending â€˜our man in Cairo` out to a dusty government office to photocopy documents aren`t over completely, but they`re well on their way. Make sure you`re working with people who are using the most up to date solutions, or you`ll be picking up the tab for their inefficiency. 4. Use due-diligence information wisely
Investing in knowing more about who you`re dealing with makes good business sense, but using the information rashly doesn`t. If you`re setting up an enterprise or drawing up a contract and you find out one of the parties involved has a patchy credit history or some unsavoury connections, it doesn`t necessarily mean that you can`t do business with them. Due-diligence works best when it is combined with measured judgment, which is why our last tip isâ€¦ 5. Trust your judgment
There are people and companies with unblemished public records but who will be entirely wrong for you and won`t be able to help you get where you want to go. Other people and companies may have bankruptcies to their name but be all the wiser for it. Ultimately, for anything beyond meeting your minimum legal obligations, you will be best placed to judge what`s right for you and your enterprise. Remember, it may take many hours of research and documentation to ensure a business is well protected against risk, but just one bad headline could severely damage it. At Cedar Rose we offer services that can help protect you and your business when you`re operating across the MENA region and beyond. For more information about what our market-leading business intelligence services can do for you visit to www.cedar-rose.com. Sourced Image: Freepic