Time and dollars are limited. Choose your opportunities wisely with due diligence and scenario analysis.
Evaluate growth opportunities objectively to assure growth opportunities are right for your operation. Understand how to use financial projections, breakeven analyses, and sensitivity analyses to inform your decisions and determine the best outcome for your business and your goals.
Why take time for due diligence
When growth opportunities arise, you may need to move quickly to decide and act. An efficient but comprehensive process for due diligence ensures you don't miss anything that could compromise your success.
|Preliminary Due Diligence
|Confirmatory Due Diligence
|Interviewing the seller
|Customer and employee review
What about the numbers?
A growth opportunity can make strategic sense but not be financially feasible. It's way better to find out before you sign the dotted line than after. Once you understand the baseline numbers, you can use scenario planning to test your assumptions and ensure you're making the right decision. Areas to assess include:
- All-in purchase costs
- Ongoing operating costs
- Liquidity needs
- Cash flow availability