A business depends on a host of third-party vendors to support its core business functions. These third parties may include:-
· Local agents
· Joint venture partners
These factors put third parties in a position where they can directly affect your business. So, performing Due Diligence
prior to hiring a third party or vendor becomes very important.
There are 4 major steps for effective due diligence:-
1. Procuring Business Information Report:-
This report helps you conduct due diligence and enable you to make faster decisions for your business. Corporate Investigations India’s business report includes company info such as business registration details, legal forums, financial info about the company, and the address of its head office along with the branches.
CII also carries out a financial risk assessment of the company such as its bank account, address, and branch of the bank used by the company, loans in the name of the company, and details about its management officials.
These details will help you in getting a clear image of your client and it will help you better understand the company.
2. Finding the right suppliers:-
Finding the right supplier is crucial and even more important for the manufacturer who is dependent on the need for high-quality raw material. Production timetable gets disrupted if the supplier is not able to deliver raw material at the right time of need.
Keeping the immense importance of a good supplier in mind a few things you must keep in mind while getting a supplier:-
· First will be checking its certifications and valid documents.
· Secondly, checking their past history with other clients will also help in the long run.
· We must also check the average time for an order to be fulfilled by that supplier.
· We must check consistency in delivering products and services by that supplier.
3. Geographic and Demographic assessment of the third-party vendor:-
At present time many businesses consider the whole world to be a big homogenous market and scale their businesses accordingly. But their business fails in addressing real cultural, political, and economical differences.
So to avoid such overestimation of a business market potential should not be based on the result of domestic content only. It is always good to be prepared for economic swings in the market. Even fluctuation in the exchange rate of currency can reduce your profit. It is better to analyze all these factors before scaling the business to a larger scale.
4. Reviewing your Due-Diligence process:-
Regularly reviewing your due-diligence process is a good practice that will help you get the best out of the process. Companies often forget the importance of continuous monitoring while focussing just on the initial review.
We must be vigilant with stakeholders to ensure that the Due-Diligence
process is always aligned with the need of the time.
Conduct state-of-the-art Due Diligence with Corporate Investigations India Pvt Ltd which will help you in taking better and confident decisions.