Due Diligence for Stakeholders, Potential Buyers and Investors

Are you a Stakeholder in one or more small businesses?

Are you a potential Buyer or Investor in a small business?

Do you undertake complete 360-degree Due Diligence to ensure the future-proofing of a small business where you are involved?

Increasing risks to the survival of small businesses.

Various Stakeholders in a small business have risk profiles that could be very costly should a small business close voluntarily or fail.

Pre-COVID

According to the US Bureau of Labor Statistics (BLS), 20% of businesses fail during the first two years, 45% during the first five years, and 65% during their first ten years.

With 23 million small businesses currently in the US and using an average failure rate of 9% p.a. during the first five years, 2.1 million small businesses fail each year, or 8500 small businesses fail each working day.

On a global basis, with 213 million small businesses, according to Statista, the failure rate is 19.2 million small businesses a year, or 780 000 small businesses failing every working day.

COVID from January 2022

From February to April 2020, as COVID struck, 22%, or one in five active small businesses in the US, closed their doors. The highest on record.

Tough economy ahead 2023-2028  

Small businesses’ voluntary closures and failure rates during the recession ahead, possible stagflation, and subsequent low-growth economy are likely to be substantially higher than the pre-Covid closure and failure rates of an average of 9% p.a., but not as high as the 22% or one in five businesses that closed in February- April 2020.

Defining Stakeholders.

Small businesses require:
⦿ premises from landlords
⦿ financing for business equipment rentals or ownership
⦿ asset financing
⦿ debtor financing
⦿ suppliers’ credit facilities
⦿ service providers’ credit facilities
⦿ bank overdraft facilities
⦿ investors, and potential purchasers, in part or whole
⦿ other Funders’ loans
⦿ insurers’ cover
⦿ staff who have their present and future earnings at stake.

All Stakeholders of small businesses are at risk, especially during the extremely tough times ahead.

Due Diligence

The solution for proper Due Diligence of a small business for the tough economic times ahead. 

An investment in knowledge pays the best interest- Benjamin Franklin

This website’s Your Investment section provides for an Initial Assessment Future Proofing Report to investigate the possibility of Future-Proofing a small business

As a Stakeholder or potential Buyer/Investor of a small business, the minimal payment of $490 for the Initial Assessment Future Proofing Report is for identifying whether it is feasible that a small business can be future-proofed.

This is an “acid test” approach to decide whether it is then worthwhile commissioning the Unbiased and Independent Due Diligence Report at the cost of $2600

This Due Diligence Report will determine the viability and the process to be followed to ensure that the small business not only survives but prospers during the tough economic times ahead.

This is an overall 360-degree assessment of the business and its prospects.

Below are the 20 major topics, all having numerous comprehensive interrogative and interactive steps, which are used in a Q&A process with the Small Business Owner

The Small Business Owner should share the Proactive Business Strategy and Strategic Advisory Service we provide them with their major Stakeholders or potential Buyers/Investors to provide comfort and increased confidence in both management and the future-proofing of the business. 

Stakeholders’ requests for an unbiased and independent Due Diligence Proactive Business Strategy and Strategic Advisory Service of a small business where they have a vested interest or risk profile will be charged by an upfront payment of $2600

Initially, the one-month time frame depends on the Small Business Owner’s active participation in the 20 major topics’ Q&A process.

The request for the provision of goods and/or services to the Small Business Owner should be withheld until the unbiased and independent Due Diligence Proactive Business Strategy is completed and Strategic Advisory Service is provided to the Small Business Owner. They must provide the Due Diligence Report to one or more stakeholders requesting our Due Diligence services. 

Should this requested information be provided by the Small Business Owner to the Stakeholder/s, they can approach me for any further information.  

As a PDF report can be altered with the correct software, it is recommended that the Stakeholder/s communicate with me to clarify any uncertain statements in the Due Diligence Report.

The preferential route is that the Stakeholder/s can request that the Small Business Owner permits me to supply the Proactive Business Strategy Report and the Strategic Advisory Service information directly to the Stakeholder/s. 

Verifying any information can be requested to validate the information the small business owner supplied.

Should the Small Business Owner not provide the information requested by the Stakeholder/s, this will speak volumes.

The 20 Major Topics and the  comprehensive, interrogative, interactive Q&A process with the Small Business Owner

The 20 major topics I cover in creating a Proactive Business Strategy and the Strategic Advisory Service are below. 

  1. Understanding your business– past, present, and future 
  2. Positive and negative trends affecting and impacting your business 
  3. Positive and negative aspects of the physical location/s of your business 
  4. Digital participation of your business 
  5. Your abilities to manage your business. 
  6. Strengths, Weakness, Opportunities, Threats affecting your business (SWOT analysis) 
  7. Customer analysis
  8. Employee analysis
  9. Competitor analysis
  10. Inventory Control analysis
  11. Goods Suppliers and Service Providers analysis
  12. Investor analysis
  13. Funders, Financiers, and major Creditors analysis
  14. Stakeholder strategy to assist you 
  15. Premises analysis 
  16. Income, expenses and financial ratios analysis
  17. Financial controls analysis 
  18. Potential for either growth or decay of the business 
  19. Proactive Business Strategy
  20. The Strategic Advisory Service flows from the Proactive Business Strategy.

The future isn’t what it used to be!

Forewarned, forearmed- Robert Greene- (1592)

Most stakeholders will look at the latest financial statements, projected cash flows, and profitability of a small business to determine its risk profile. They will also do a credit check on the potential borrower’s business and them.

Some stakeholders will go beyond the numbers and look at the business environment in which the small business operates. They will talk to management to get a sense of their capabilities and vision for the business.

How unbiased and independent would a Small Business Owner be if they wanted to use the facilities of existing and potential Stakeholders in their business. Business owners usually wear rose-tinted glasses. 

The existing and potential Stakeholders may even talk to staff, suppliers, landlords, customers, competitors, investors, and other funders. Still, a few Stakeholders only do that, and its thoroughness may be questioned. 

Most Stakeholders’ employees are looking to secure new business to reach their bosses required sales targets. They invariably only use the latest financial information in their credit risk assessment. That’s like looking in the rear-view mirror while driving forward into tumultuous times

The risks to these existing and potential Stakeholders are very real as there are 23 million small businesses with less than 20 employees in the USA alone. That is 70% of all businesses in the USA. A failure rate of 9% p.a occurs. 

Some 8500 small businesses fail every working day in the U.S., with Stakeholders bearing sizeable losses.

Globally, there are 213 million small businesses comprising well over 90% of all businesses. Here 780,000 small businesses fail every working day.

As a Stakeholder in small businesses, which businesses can you say are future-proofed and likely to survive and be prosperous, and which ones aren’t? 

What’s your vested interest or risk profile of small businesses you are involved with during the post- Covid and forthcoming recession, possible stagflation, and a successive low-growth economy? 

An unbiased and independent Due Diligence Report of a small business is essential. 

With small businesses’ Pre-Covid failure rate of 20% by year 2, 45%% by year 5, and 65% by year 10;  a 22% failure rate in February- April 2020, and with a possible failure rate of 13.5% p.a during the tough economic times ahead, a Due Diligence Report of a small business is essential. 

A Perfect Storm is brewing for small businesses’ survival

At the World Economic Forum (WEF) in May 2022, the International Monetary Fund (IMF) stated that “the global economy faces its biggest test since the Second World War.” They also stated that “we face a confluence of calamities.” 

Also, at the WEF, the German Economic Minister warned of the possibility of a global recession.

Janet Yellen, US Treasury Secretary, and U.S. Former Chair of the Fed Reserve, Ben Bernanke in the U.S., are discussing the possibility of stagflation.

Jamie Dimon, the CEO of JPMorgan Chase, says, “prepare for an upcoming economic hurricane. That hurricane is right out there down the road coming our way.”

A perfect storm is brewing, and small businesses comprising over 90% of all businesses worldwide will be the hardest hit business sector.

I provide a Due Diligence security blanket to potential and existing Stakeholders of a small business in the brewing ‘perfect storm’ ahead.

As explained throughout this website, I can provide a Due Diligence Report security blanket to small business Stakeholders.

One or more Stakeholders should insist that if the small business owner wants to use the goods and or services of the Stakeholder/s, they must first undergo my unbiased and independent Due Diligence Proactive Business Strategy and Strategic Advisory Service. 

I believe it is crucial that the Stakeholder/s pay the Investment of $2600 for the Due Diligence Proactive Business Strategy and Strategic Advice Service. This payment will ensure that the business’s comprehensive, interrogative, interactive Q&A process and the Due Diligence Report are unbiased and independent.

Obtaining the goods and or services that the potential Stakeholder/s are requested to provide to the small business should then be dependent on the prompt and thorough cooperation of the small business owner/s providing the required information to enable me to compile the unbiased and independent Due Diligence Proactive Business Strategy and Strategic Advice Service

Subject to the promptness of the Q&A process, this Due Diligence process should take one month

For Stakeholder/s investing $2600 for an unbiased and independent Due Diligence, Proactive Business Strategy, and Strategic Advice Report of a small business is a drop in the ocean compared to their financial risk exposure in the small business. 

I trust I have proved my case for one or more Stakeholders to request an unbiased and independent Due Diligence Proactive Business Strategy and Strategic Advice Report from me for any small business that requests you to provide goods and services.

 

Initial Assessment Future Proofing Report

Small Business Owner / Stakeholder / Buyer / Investor

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