Not Already Conducting Operational Due Diligence Pre-Deal?
Not already conducting operational due diligence pre-deal? Mark Cappell, Founder and Managing Partner at Cappco Partners, tells us why you should be.
Investing in companies is risky. When your decision is dependent on due diligence, then the quality of your due diligence will be directly influenced by the depth and breadth of information you can access.
Inadequate due diligence is a costly mistake and should be avoided at all costs. Yet up until now, in the endeavour to fully understand a business, investor due diligence has tended to focus on the commercial, financial and legal aspects of a company.This is surprising given that the function providing the most significant insight into a company’s potential for growth is sales and marketing.
Therefore it makes sense for investors, especially those prioritising growth to combine operational due diligence with commercial due diligence to get a true 360 degree view of the potential investment’s ability to deliver to its growth plan.
Operational due diligence:
- Helps investors determine whether a business plan is achievable.
- Identifies whether additional value can be achieved by improving sales and marketing operations.
- Identifies risks and provides recommendations for mitigating them.
A very successful firm that is currently leading the way in operational due diligence is CappcoPartners. This company employs a team of sales and marketing professionals with track records of improving sales and marketing performance and executing corporate turnarounds where revenue growth and creation is essential.
The businesses operational due diligence services supplement the work carried out by commercial due diligence firms, ensuring investors fully understand target companies’ potential and risk for growth.
The firm uses a systemic and fact based approach to assess a target company’s current sales and marketing capabilities, processes, strategy and management, that combines theory with actual practical experience.
This is what differentiates CappcoPartners from many of the traditional consultancies also providing sales & marketing due diligence, providing CappcoPartners with this advantage within their business.
Without depth knowledge of sales processes, traditional consultancies may not be the best choice for this specialist audit. However, CappcoPartners doesn’t just analyse the sales pipeline information it receives, it uses its experience to question the sales pipeline methodology.
Furthermore its thorough review of a target company’s sales and marketing processes that will verify the accuracy of the business plan and whether it is achievable with existing operational facilities and the capital expenditure outlined in the business plan.
According to the BVCA, currently 82% of investments fail to meet their growth plans. This is why smart investors today are turning to companies like CappcoPartners for alternative, yet proven methods for achieving revenue growth.