Business investment due diligence consulting refers to a comprehensive, in-depth and objective investigation and evaluation of the market, financial, legal, technical and other aspects of the investment target before making business investment decisions to determine the value and risk of the investment and provide investors with professional advice and solutions. This article will introduce you to how to conduct business investment due diligence consulting, six steps to success. These steps are:1.Clarify the objectives and scope of due diligence;2.Collect and collate relevant information;3.Analysis and evaluation of information;4.Develop and optimize the program;5.Writing and submitting reports;6.Follow-up and implementation of the programme. By following these steps, you can improve the efficiency and quality of your due diligence, reduce the risk and cost of your investment, and increase the return and value of your investment.

1. clear objectives and scope of due diligence

Before you begin a business investment due diligence consultation, you need to clarify your due diligence goals and scope. The due diligence target refers to what kind of results you want to achieve through due diligence, such as: understanding the market position, competitive advantage, profitability, growth potential, etc. of the investment target; evaluating the reasonable valuation, risk factors, return forecast, etc. of the investment target; and formulating the appropriate investment strategy, transaction structure, agreement terms, etc. The scope of due diligence refers to what aspects of the investment target you need to investigate and evaluate, such as: market due diligence, financial due diligence, legal due diligence, technical due diligence, etc. Clarifying the objectives and scope of due diligence will help you determine the key and difficult points of due diligence, make a reasonable time plan and resource allocation, and avoid ineffective or repetitive work.

2. collection and collation of relevant information

Once you have defined your due diligence goals and scope, you need to collect and organize relevant information. Information is the basis of due diligence, and you need to obtain enough, complete, and true information to make effective analysis and evaluation. You can collect information through a variety of channels and methods, such as: obtaining various documents, reports, contracts, etc. from the investment target; visiting the investment target's website, social media, etc.; interviewing the investment target's management, employees, customers, suppliers, etc.; Visit the production base and sales outlets of the investment target; use third-party data platforms, industry reports, expert consultation, etc.

You need to sort out and classify the collected information, for example, it is divided into market, finance, law, technology and other sectors according to the scope of due diligence. According to the source of information, it is divided into investment target provision, self-acquisition, third-party provision and other categories. According to the nature of information, it is divided into qualitative information, quantitative information, subjective information, objective information and other types. You also need to verify and verify the information, such as: checking the completeness, consistency, accuracy, timeliness, etc. of the information; comparing internal and external data of the information, discovering and explaining differences; confirming the authenticity and legality of the information, and eliminating falsehoods and irregularities.

3. analysis and evaluation information

After collecting and organizing the relevant information, you need to analyze and evaluate the information. Analysis and evaluation is the core of due diligence. You need to use professional knowledge and methods to conduct in-depth analysis and judgment on all aspects of the investment target to determine the investment value and risk. You can use a variety of tools and techniques for analysis and evaluation, such as: useSWOTanalysis method, Porter's five forces model,PESTAnalysis method, etc., to analyze the internal advantages and disadvantages of the investment target, external opportunity threats, industry competition situation, macro environment impact, etc.; Use financial ratio analysis method, cash flow analysis method, financial forecast model, etc. to analyze the financial situation, profitability, growth potential, financial risk, etc. of the investment target; Use market research method, user research method, competitor research method, etc, analyze the market size, market share, market demand, market trend, etc. of the investment target; use the valuation model method, income model method, risk model method, etc. to evaluate the reasonable valuation, expected return, potential risk, etc. of the investment target. You also need to summarize and summarize the results of the analysis and evaluation, such as: extracting key data and indicators to form the key points of due diligence; identifying problems and hidden dangers and proposing due diligence risks; identifying opportunities and advantages and making due diligence recommendations.

4. formulation and optimization

After analyzing and evaluating the information, you need to develop and optimize your plan. The solution is the output of due diligence, and you need to provide investors with professional solutions and implementation recommendations based on due diligence goals and results. You can make different plans according to different situations. For example, if the investment target meets the expectations of investors, you can make investment strategy plans, including investment amount, investment method, investment return, etc.; if there are some problems or risks in the investment target, you can make risk control plans, including risk identification, risk assessment, risk avoidance, etc. If the investment target has some opportunities or advantages, you can develop value enhancement plans, including value creation, value realization, value sharing, etc. You also need to optimize and improve the program, such as: consider the feasibility and operability of the program, to avoid over-idealization or complexity; consider the flexibility and adaptability of the program, leaving some room or flexibility; consider the coordination and consistency of the program, consistent with the goals and interests of investors.

5. writing and submission of reports

After you have developed and refined your plan, you need to write and submit a report. The report is a presentation of due diligence, and you need to present the process and results of due diligence to investors in a clear, concise and professional manner. You can refer to the following report structure and content to write your report:

Cover: Includes basic information such as the title, date, author, and recipient of the report.

Table of Contents: Includes the sections and page numbers of the report for easy access.

Abstract: Including the main purpose of the report, methods, results, conclusions and recommendations, a brief summary of the core content of the report.

Text: includes the following parts:

Introduction: Introduce the basic information of the investment target, including name, industry, scale, history, etc., explain the objectives and scope of due diligence, including investors' expectations, the focus and difficulties of due diligence, etc., and explain the methods and tools of due diligence, including information collection, analysis and evaluation, program development, etc.

Market due diligence: analyze the market situation of the investment target, including market size, market share, market demand, market trend, etc.; evaluate the market value and risk of the investment target, including market opportunities, market threats, market competitiveness, etc.; put forward market-related suggestions and plans, including market development, market maintenance, market cooperation, etc.

Financial due diligence: analyze the financial status of the investment target, including financial statements, financial ratios, financial forecasts, etc.; evaluate the financial value and risks of the investment target, including financial profitability, financial growth potential, financial risk factors, etc.; put forward financial-related suggestions and programs, including financial optimization, financial monitoring, financial coordination, etc.

Legal due diligence: analyze the legal status of the investment target, including legal documents, legal contracts, legal disputes, etc.; evaluate the legal value and risks of the investment target, including legal compliance, legal protection, sources of legal risks, etc.; put forward legal-related suggestions and programs, including legal review, legal consultation, legal formulation, etc.

Technical due diligence: analyze the technical status of the investment target, including technical products, technical services, technical innovation, etc.; evaluate the technical value and risks of the investment target, including technical advantages, technical potential, technical obstacles, etc.; put forward technology-related suggestions and solutions, including technical improvement, technical support, technical cooperation, etc.

Comprehensive evaluation: a comprehensive analysis and evaluation of the above aspects, giving the overall value and risk of the investment target, as well as the best plan that investors should take. For example, based on market due diligence, financial due diligence, legal due diligence and technical due diligence, we believe that the investment target has high market value and growth potential, but there are also certain financial and legal risks. We recommend that investors invest in the investment target in the form of equity investment, with reasonable valuation and terms, and after investment, through market cooperation, financial monitoring, legal coordination and technical support, to enhance the value of the investment target and reduce investment risk.

Conclusion: Summarize the main contents of the report, reiterate the purpose and results of the report, emphasize the recommendations and programs of the report, and call for investors to take action.

Appendix: includes the data, charts, literature, etc. cited or referenced in the report, as well as the contents of the report that are not specified in detail.

When writing a report, you need to be aware of the following:

Use professional language and format to maintain the logic and consistency of the report.

Use data and facts to support the views and conclusions of the report and avoid subjective and one-sided judgments.

Use charts and pictures to assist in the presentation and description of the report to improve its readability and attractiveness.

Use citations and comments to identify the source of the report and avoid plagiarism and infringement.

When you submit your report, note the following:

According to the requirements of investors, choose the appropriate submission method, such as e-mail, network disk, cloud, etc.

According to the requirements of investors, choose the appropriate submission time, for example: after the end of the due diligence, in the process of the due diligence, before the start of the due diligence, etc.

According to the requirements of investors, select the appropriate submission object, such as: investors themselves, investor team, investor representatives, etc.

6. follow-up and implementation programme

After writing and submitting the report, you need to follow up and execute the program. The program is a due diligence implementation, and you need to maintain communication and collaboration with investors to help them achieve the program's goals. You can follow up and implement different schemes according to different situations. For example, if the scheme involves trading or cooperation with the investment target, you can participate in the negotiation, signing and execution of the trading or cooperation; If the scheme involves optimization or improvement of the investment target, you can provide optimization or improvement methods, guidance, supervision and other services; If the scheme involves evaluation or monitoring of the investment target, you can provide standards, tools, reports, and other resources for evaluation or monitoring. You also need to evaluate and feedback on the program, such as: check the implementation and effectiveness of the program, identify and solve problems; collect the implementation data and results of the program, analyze and summarize the experience; report the implementation progress and results of the program to investors, and obtain and improve opinions.