Business due diligence consulting is a professional management consulting service, which involves knowledge and skills in multiple fields and levels, requiring rich industry experience and market insight, as well as systematic analysis frameworks and tools. As one of the most leading and authoritative independent third-party research and investment and financing consulting institutions in China, Shangpu Consulting has 14 years of experience in commercial due diligence consulting and has provided professional commercial due diligence consulting services to more than 5000 clients, covering a number of industries and fields, including emerging fields such as semiconductors, artificial intelligence, automatic driving, new energy, financial technology, medical health and so on, as well as traditional manufacturing, consumption, service, energy, environmental protection and other industries. The business due diligence consulting service of Shangpu Consulting is guided by customer needs, supported by data, professional as the standard, and value as the goal. It provides customers with comprehensive, in-depth and objective business due diligence consulting reports to help customers achieve business The success of decision-making.

What is commercial due diligence consulting?

Business due diligence consulting (CommercialDueDiligence,CDD) refers to a comprehensive, in-depth and objective assessment and analysis of the business prospects, market competitiveness, operational efficiency, risk factors, etc. of the target company or project before business decisions such as investment, mergers and acquisitions, cooperation, etc. Professional services. The purpose of commercial due diligence consulting is to provide investors with a reliable basis for decision-making, help them identify opportunities and risks, develop a reasonable valuation and transaction structure, and maximize investment returns.

Commercial Due Diligence Consulting is an important component of due diligence, alongside Financial Due Diligence (FinancialDueDiligence,FDD) and Legal Due Diligence (LegalDueDiligence,LDD) as the three pillars of investment decisions. Financial due diligence mainly focuses on the target company's financial situation, financial statements, financial risks, etc., legal due diligence mainly focuses on the target company's legal compliance, legal risks, legal documents, etc., while commercial due diligence consulting mainly focuses on the target company's business model, business environment, business competitiveness, business risks, etc. The focus of business due diligence consulting is to review and validate the target company's business plan, analyze whether it has sustainable profitability and growth potential, and whether there are potential business problems and challenges.

What does the commercial due diligence consultation include?

The content of commercial due diligence consulting varies according to different industries and projects, but it can generally be divided into the following aspects:

Market analysis: analyze the scale, structure, trends, drivers, demand characteristics, policies and regulations of the market in which the target company is located, and evaluate the attractiveness and development potential of the market.

Competitive analysis: analyze the scale, strategy, products, channels, prices, brands, innovation capabilities, etc. of the target company's main competitors, and evaluate the target company's competitive advantages and disadvantages, as well as competitive threats and opportunities.

Customer analysis: analyze the number, distribution, demand, satisfaction, loyalty, conversion rate, retention rate, etc. of the target company's existing and potential customers, and evaluate the target company's customer value and customer relationship.

Supplier analysis: analyze the quantity, distribution, quality, cost, partnership, substitution, etc. of the target company's major suppliers to assess the stability and efficiency of the target company's supply chain.

Operational analysis: analyze the target company's core business processes, organizational structure, human resources, technical capabilities, quality control, risk management, etc., and evaluate the target company's operational efficiency and effectiveness.

Financial Analysis: Analyze the target company's revenue, costs, profits, cash flow, assets and liabilities, return on investment, etc., and evaluate the target company's financial position and financial performance.

Business Plan Analysis: Analyze the rationality, feasibility, consistency, robustness, etc. of the target company's business plan, verify the key assumptions and sensitive factors of the business plan, and predict the results and risks of the business plan.

What is the process of commercial due diligence consulting?

The process of commercial due diligence consulting can generally be divided into the following stages:

Start-up phase: communicate with customers to clarify the project objectives, scope, time, resources, output, etc., sign confidentiality agreements and service contracts, establish project teams and communication mechanisms, and formulate project plans and work arrangements.

Data collection stage: collect data and information of the target company and relevant markets through various channels and methods, including but not limited to: reading the materials provided by the target company, visiting the website and social media of the target company, interviewing the management and employees of the target company, interviewing the customers and suppliers of the target company, interviewing the experts and observers of the industry, investigating the reports and databases of the industry, and investigating the public information of competitors, investigate changes and impacts of policies and regulations, etc.

Data analysis stage: clean, organize, summarize, classify, process, model and verify the collected data and information, and use quantitative and qualitative analysis methods to deeply evaluate and analyze the business situation and business prospect of the target company and related markets from different angles and levels, so as to identify the advantages, disadvantages, opportunities and threats of the target company, and potential business issues and challenges.

Report writing stage: according to the results of the analysis and customer needs, write a business due diligence consulting report, the structure and content of the report generally include: project background, project objectives, project scope, project methods, market analysis, competitive analysis, customer analysis, supplier analysis, operational analysis, financial analysis, business plan analysis, business due diligence.Conclusion, commercial due diligence recommendations, etc. The format and style of the report generally follow the following principles: clear, concise, logical, objective, professional and persuasive.

Report delivery phase: deliver the commercial due diligence consulting report to the client in written and oral form, communicate and discuss with the client, answer the client's questions and concerns, explain the key points of the report andConclusionProvide suggestions for improvement and improvement of the report to ensure customer understanding and satisfaction of the report.

Frequently Asked Questions and Answers for Commercial due diligence consulting

In the practice of commercial due diligence consulting, some problems and difficulties are often encountered. The following are some common questions and answers:

Question: Is the data and information of the target company or project reliable?

Answer: The reliability of the data and information of the target company or project is the key to commercial due diligence consultation. Therefore, in the process of commercial due diligence consultation, it is necessary to review and verify the data and information provided by the target company or project, and collect and compare the data and information of the third party through various channels and methods, such as industry reports, competitor information, customer feedback, expert opinions, etc, analyze and evaluate the sources, methods, time, scope, assumptions, etc. of data and information, and examine and test the consistency, reasonableness, completeness, and validity of data and information to ensure the reliability of data and information.

Question: Is the data and information of the target company or project sufficient?

Answer: The adequacy of the data and information of the target company or project is the basis of commercial due diligence consultation. Therefore, in the process of commercial due diligence consultation, it is necessary to collect and supplement the data and information of the target company or project, and obtain and expand relevant data and information through various channels and methods, such as market research, competition analysis, customer interview, supplier survey, operation evaluation, financial audit, etc, analyze and evaluate the content, depth, breadth and angle of data and information, and examine and test the coverage, detail, diversity and comprehensiveness of data and information to ensure the adequacy of data and information.

Question: Is the data and information of the target company or project sensitive?

Answer: The sensitivity of the data and information of the target company or project is the difficulty of commercial due diligence consulting. Therefore, in the process of commercial due diligence consulting, the data and information of the target company or project need to be protected and managed by signing a confidentiality agreement, setting up a special data and information platform, limiting the use and dissemination of data and information, etc, analyze and evaluate the security, confidentiality and proprietary nature of data and information, and examine and test the leakage, tampering and abuse of data and information to ensure the sensitivity of data and information.