The commercial due diligence process has some difficult questions to answer. These include:
Demand
- Is the demand in the market future-proof?
- Is the company operating in the right market segments?
- Will the introduction of a new technology affect demand? (If so, how?)
Customers
- How strong are the company’s relationships with key customers?
- Will their buying behaviour change in the next five years?
- Can a larger group of customers be reached with the existing distribution channels?
Products
- How do the products rate in comparison with the competition?
- How does the product lifecycle vary?
Business plan
- Will the company be able to accomplish its forecasts?
- How robust are the assumptions that underlie these forecasts?
- To what extent does the business plan take account of changes? What changes would substantially affect the business plan?