Due Diligence

Due Diligence

BUS 463: Entrepreneurship Feasibility and Analysis

How to conduct the due diligence for the business venture.

As the one who provides the capital that business used to start and expand, my assessment should provide the real picture of the business so that necessary management actions can be taken to ensure that the business makes further steps. The following is how I will conduct my assessment of the business.

Analysis of the goals and objectives of the business. As the venture capitalist, I will analyze the goals and objectives of the business. I will analyze these in line with what the business has achieved so far since I invested my capital in it. at this point, to know that the venture is viable, the business is suppose to have started achieving some of its goals and objectives that were outlined in its plan. A viable business venture should after it inception start achieving some of its goals and objectives. Some of these goals and objectives include increase in size, increase in the number of employees, increase in the earrings of the business. With all these, as the main financier, I will be able to determine whether the business is making any progress or not.

( Abrams, R. M. (2003

Full check of the financial documents. To know whether the business venture is profitable or not, the financial books of account will reveal. Some of these books of accounts include the balance sheet, the income statements, the profit and loss account and many other books of account. Most of these documents will give the exact picture of the viability of the business venture. As the financier of the business, these books will communicate whether the business will be able payback what was invested in the business or not. (Abrams, R. M. (2003

Risk analysis. I will analyze the risks that the business is likely to go through. The riskiness of the business is likely to show whether as the key investor, I will get any income from the business. The higher the risks that a business is likely to face the higher the chances that the invested capital may be lost. It is therefore important to include the risk analysis in conducting due diligence. (Harvey, M. G., & Lusch, R. F. (1995).

Competition in the market. I will analyze the competitive nature of the market in which the business operates in. this will let me know whether to embark on more activities that can make the business more competitive or not.

The most crucial step is the analysis of the financial statements. This is so crucial since it will reveal any other activity that may have made the business made losses or made wrong entries that may create a false status of the business.

Entrepreneurs should use professionals in this step since they are the only people who can reveal the real pictures of the financial status of the business.

Reffernces.

Abrams, R. M. (2003). The successful business plan: secrets & strategies. The Planning Shop.

Harvey, M. G., & Lusch, R. F. (1995). Expanding the nature and scope of due diligence. Journal of Business Venturing, 10(1), 5-21.

Angwin, D. (2001). Mergers and acquisitions across European borders: National perspectives on preacquisition due diligence and the use of professional advisers. Journal of world business, 36(1), 32-57.